Samsung's mobile division may report a loss despite strong Galaxy S26 sales

While Samsung Electronics expects record-breaking profits for the second quarter of this year, its mobile division, Samsung MX, may report a loss. The potential loss is reportedly a direct result of the astronomical rise in memory chip prices. If analysts' forecasts are accurate, Samsung MX could remain in the red for the next few quarters.

According to DealSite, securities industry analysts estimate that Samsung MX's earnings could range from a profit of KRW 1.9 trillion (~$1.38 billion) to a loss of KRW 1.5 trillion (~$1.09 billion). However, most estimates range from a profit of KRW 500 billion (~$364 million) to a loss of KRW 1 trillion (~$729 million). If Samsung's mobile division reports a loss, it would be its first quarterly loss ever, and this is despite strong sales of the Galaxy S26 series.

In the first quarter of 2026, Samsung MX reported an operating profit of KRW 2.8 trillion (~$2.04 billion). In the second quarter of 2025, the company posted an operating profit of around KRW 3.1 trillion (~$2.26 billion). Even during the Galaxy Note 7 battery crisis, Samsung MX reported a profit of KRW 100 billion (~$73 million).

The possible loss in the second quarter of 2026 is primarily due to rising memory chip prices. According to analysts, the cost of RAM chips in an $800 phone has risen from 14% to 23%, while NAND flash storage chips could account for up to 15% of the phone's bill of materials. This has put intense pressure on all smartphone brands, not just Samsung.

To mitigate the price increase, Samsung is diversifying its supply chain for upcoming phones. For the Galaxy Z Flip 8, it is reportedly using Qualcomm's Snapdragon chips in China and the United States, while using the Exynos 2600 chip in other markets. It has also decided to launch three foldable phones instead of two to diversify its portfolio.