tech
April 24, 2026
Report: Samsung execs worried company could lose money on smartphones for the first time
The AI-driven memory shortage is hitting Samsung’s bottom line.
TL;DR
- Samsung MX head TM Roh warns of a potential first net loss for the company's smartphone division in 2026.
- The primary driver for this potential loss is the increasing cost of DRAM and NAND memory components due to the demand for AI capacity.
- AI applications require significant amounts of memory, with some AI CPUs consuming RAM equivalent to thousands of smartphones.
- Memory and storage costs are expected to account for over a third of a budget phone's cost by mid-2026.
- This increase in manufacturing costs is leading to price hikes on various Samsung devices, including mid-range and premium models.
- Samsung's semiconductor division is currently performing exceptionally well, reporting record profits in Q1 2026.
- Industry projections suggest that DRAM production may fall significantly short of demand in 2027, even with accelerated expansion plans.
- The demand for AI applications is unlikely to decrease, suggesting that supply constraints for memory components will persist.
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