For the first time in its history, Samsung‘s mobile division (MX) could show an annual deficit. TM Roh, head of the mobile unit, reportedly expressed serious concerns regarding a potential financial downturn. Samsung has historically been the powerhouse of the smartphone market. However, its profits are at risk amid rising parts costs due to AI endless memory demand.
The AI appetite for memory
The main reason for this instability is the global shortage of LPDDR memory. The chips that traditionally targeted smartphones are now being used to power AI supercomputers and data centers. To understand the scale of this “RAM drain,” a single Nvidia AI supercomputer consumes as much LPDDR5X memory as approximately 4,600 units of a flagship Galaxy S26 Ultra.
As AI giants like Nvidia and Tesla snap up the world’s supply of mobile-grade RAM, prices have surged. Reports from Korea say that the price of memory almost doubled in the first three months of 2026. Plus, another 80% hike is possible in the coming months. This leaves smartphone manufacturers like Samsung with a difficult choice: absorb the costs and risk a deficit, or pass the burden onto consumers.
Samsung Mobile’s first-Ever Annual Loss Possible in 2026
Samsung’s MX business unit has long been a reliable engine of profit. But the current “RAM crisis” is paired with a cooling smartphone market. According to IDC, global shipments fell 4.1% early this year. This means Samsung is paying more to build phones that fewer people are buying.
Internal memos (via Jukan) reveal that the leadership is no longer just speculating about external risks. The concern is now a practical one: can the mobile division remain in the black when memory now accounts for nearly 20% of a premium phone’s total manufacturing cost?
The cost of staying premium
To maintain its lead in the “AI Phone” race, Samsung needs high-capacity RAM more than ever. However, the price of being at the cutting edge is rising. Analysts at Counterpoint Research suggest that consumers should expect price hikes of up to $200 for premium models as brands struggle to secure enough stock.
While Qualcomm and other partners are meeting with memory suppliers to find a way out, the reality for Samsung is stark. The company that once dominated through vertical integration is now finding itself at the mercy of a global AI gold rush, where the hardware needed for your next phone is being outbid by the hardware needed for the next big AI model.
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