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

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Samsung has posted strong smartphone sales numbers in the last few quarters, even beating Apple in the Q2 2026 to regain the top position, per data from Counterpoint research. That should mean strong profits, right? Well, not in this case, as it turns out the South Korean giant is reportedly making no profits from its smartphone business.

Even worse is that the current scenario is reportedly forcing Samsung to cut smartphone production by as much as 30%, and what’s to blame here: soaring prices of RAM and storage. The entire smartphone industry is feeling the pain because of the increasingly rising cost of components, and finding it difficult to maintain profitability.

According to a Money Today report, citing industry sources, the South Korean giant has asked its suppliers to reduce smartphone production by as much as 20–30% in Q4 of this year. According to the latest estimates, Samsung has had to pay around $145 per 12GB LPDDR5X RAM chip this year, which is nearly a 175% increase for that specific component compared to a year ago.

Prior to the cut in production, Samsung was planning to manufacture around 270 million smartphones this year, but now that figure could drop to somewhere around 200 million.

Samsung launched the Galaxy S26 series and Galaxy Z8 foldables with a higher price tag. Even after that, it increased the price of its latest flagships by up to $100. Older flagships and mid-range phones didn’t remain protected either. They have also faced sharp price rises in the recent past. Despite such price hikes, Samsung’s mobile division is struggling to make any profit.

Unfortunately, the struggle won’t end pretty soon, as DRAM prices for the third quarter are expected to rise another 20 percent and reach $180. This sharp rise in the component cost may be actually hurting the brand more to make more devices.

Samsung’s memory chip business is making record profits

Samsung’s mobile division reported the first-ever quarterly loss in its history in Q2 2026. The Device eXperience (DX) division reported a loss of around $544 million, with the mobile division alone accounting for about $476 million of that. Current market conditions suggest the mobile division will report even bigger losses in Q3 and Q4.

On the bright side, Samsung is generating record profits from its memory chip business. The DS Division, which is responsible for memory chips and semiconductors, delivered its biggest quarterly operating profit of KRW 53.7 trillion in Q1 2026.

In Q2 2026, the operating profit from the DS division rose sharply to a staggering KRW 89.2 trillion, surpassing NVIDIA to become the most profitable technology company in that quarter. For the third quarter, Samsung’s DS division is estimated to have exceeded an operating profit of over KRW 100 trillion.

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