Samsung execs fear first-ever smartphone loss: Report
▼ Summary
– Smartphone sales have become difficult as the market is mature, and many manufacturers have exited.
– Samsung MX head TM Roh warned that the company may see its first-ever net loss on smartphones in 2026.
– Soaring prices of DRAM and NAND components, driven by AI demand, are the likely cause despite strong Galaxy S26 sales.
– Mobile memory like LPDDR5x is increasingly consumed by AI hardware, such as Nvidia’s Vera CPU and Rubin GPU platforms.
– A single server with 36 Vera CPUs will require as much LPDDR5x memory as 4,600 Galaxy S26 Ultra devices.
The era of easy smartphone sales is over. Once a booming industry where every new device felt like a major leap forward, the market has matured, and many manufacturers have bowed out. Now, even a titan like Samsung, which reliably refreshes its lineup every couple of years, is facing an unprecedented threat: the possibility of its first-ever net loss on smartphones in 2026. The culprit? The relentless, resource-hungry race to build more AI capacity.
According to a report from Korean outlet Money Today, Samsung MX (Mobile Experience) head TM Roh has warned company leadership that the division could be heading for a historic loss. This would be a stark departure from past resilience. Even through global economic downturns and pandemic-era supply chain meltdowns, Samsung’s mobile division remained profitable. The breaking point now appears to be the skyrocketing price of DRAM and NAND memory, driven by insatiable AI demand.
This isn’t just a phone problem. The shortage of these components is squeezing every corner of the computing world, from consumer laptops to massive servers. The LPDDR5x memory found in most modern smartphones is increasingly critical for AI workloads. For example, Nvidia’s upcoming Vera AI CPU, set to replace Grace later this year, will feature up to 1.5 TB of LPDDR5x memory. Nvidia’s rack-scale AI platforms will pack 36 Vera CPUs alongside 72 Rubin GPUs. To put that in perspective, the CPUs in a single server will consume enough RAM to equal 4,600 Galaxy S26 Ultra devices (each with 12GB).
Despite strong sales of the Galaxy S26 series, the sheer volume of memory required for AI infrastructure is creating a perfect storm. The component costs are rising so fast that even Samsung’s robust phone sales may not be enough to offset the margin pressure. The company now faces the grim prospect of its smartphone business finishing 2026 in the red for the very first time.
(Source: Ars Technica)
