Samsung’s making no profit from its smartphone business despite strong sales, may cut production by up to 30%

Samsung's mobile division, despite reportedly regaining the top position in Q2 2026 smartphone sales, is facing significant financial pressure. The company is reportedly making no profit from its smartphone business, with the mobile division alone accounting for an estimated $476 million loss in Q2 2026. This situation is attributed to a sharp rise in component costs, specifically for RAM and storage chips.

The increase in component prices is notable; for instance, a 12GB LPDDR5X RAM chip is estimated to cost Samsung around $145 this year, which is nearly a 175% increase compared to a year ago. This cost pressure has reportedly led Samsung to consider reducing its planned smartphone production for the year from 270 million units to approximately 200 million units. Even after increasing prices for its latest flagships, the mobile division has struggled to achieve profitability.

In contrast to its mobile division, Samsung's Device Solutions (DS) division, which manufactures memory chips and semiconductors, is reporting record profits. This division's operating profit rose to KRW 89.2 trillion in Q2 2026, reportedly surpassing NVIDIA for that quarter. Estimates for Q3 2026 suggest the DS division could exceed KRW 100 trillion in operating profit, illustrating a financial divergence within the company's segments.