Backside line: Samsung’s cell division faces an unprecedented monetary menace not from competitors or weak gross sales, however from the AI trade’s insatiable urge for food for reminiscence elements. TM Roh, head of Samsung MX, has alerted firm management that the division might publish its first web loss within the division’s historical past. The perpetrator is LPDDR5X reminiscence and NAND storage, elements now commanding premium costs.
The monetary pressures stem from a elementary shift in smartphone invoice of supplies. DRAM and NAND was minor prices however now dominate machine bills.
Counterpoint Analysis initiatives that RAM will signify over one-third of whole manufacturing prices for finances telephones by mid-2026, whereas even flagship gadgets see reminiscence accounting for greater than 20% of their construct expense. This marks a dramatic reversal from the latest previous, when utility processors and shows commanded the most important price shares.
The reminiscence scarcity impacts computing {hardware} throughout classes, from client laptops to enterprise servers. LPDDR5X has grow to be notably important for AI purposes. Nvidia’s Vera AI CPU will pack as much as 1.5 TB of LPDDR5X reminiscence. The corporate’s forthcoming rack-scale AI platforms will deploy 36 Vera CPUs alongside 72 Rubin GPUs, a single server configuration that may devour as a lot RAM as roughly 4,600 Galaxy S26 Extremely smartphones, every containing 12GB of RAM.
Samsung has begun phasing out LPDDR4 manufacturing to allocate extra capability to LPDDR5, whereas opponents Micron and SK Hynix are equally ramping output. Regardless of these efforts, Nikkei Asia forecasts that DRAM provide in 2027 might meet solely about 60% of projected demand, even underneath optimistic manufacturing eventualities.
Supply: Counterpoint Analysis
Handset producers are actually passing reminiscence price will increase to customers. Motorola raised costs on its Moto G finances line by as much as 50%, whereas Samsung added $50 to the Galaxy A37 and A57 mid-range fashions in comparison with their predecessors.
Premium gadgets additionally price extra: the 512GB Galaxy Z Flip 7 and each the 512GB and 1TB Galaxy Z Fold 7 variants carry an extra $80, and the Galaxy Tab S11 elevated by $100.
These value changes come as Samsung’s Galaxy S26 maintains sturdy gross sales efficiency, but the cell division nonetheless faces potential losses on account of reminiscence and storage part prices which have roughly doubled.
Samsung’s smartphone enterprise faces margin strain, however its semiconductor division is posting report earnings. Samsung’s semiconductor division reportedly generated an estimated $38 billion revenue in Q1 2026, greater than seven instances its Q1 2025 earnings.
The divergence highlights how AI infrastructure funding has created winners and losers inside Samsung’s enterprise portfolio, with reminiscence manufacturing benefiting from the identical market dynamics squeezing the cell division.
