Samsung’s mobile division may face its first-ever loss

A few weeks ago, Samsung unveiled the Galaxy S26 series. The company said its new high-end phones have broken previous pre-order records and achieved double-digit growth in several markets. However, that success may not be enough to prevent a financial crisis for Samsung’s mobile business.

According to a report from FNNews, Samsung Electronics has placed its mobile division, Samsung MX, in emergency mode. The company’s home appliance and TV divisions were already operating under similar measures, which means Samsung’s Device Experience (DX) business, which includes home appliances, mobile, and TV businesses, is now under emergency management.

Despite the strong performance of the Galaxy S26 series and record pre-order figures, the company is reportedly facing profitability challenges due to sharply rising memory chip prices. Over the past year, memory chip prices have increased by about 8.5 times (850%), significantly reducing Samsung MX's profitability.

Samsung MX reported an operating profit of KRW 12.9 trillion (around $8.62 billion) last year, but that figure could fall to around KRW 5 trillion (around $3.34 billion) this year. Its profit margin, which stood at 11% in the first quarter of 2025, could drop to just 3%. Some insiders say that even maintaining a 1% profit margin could be difficult in 2026, raising concerns that the division could record its first-ever loss.

And Samsung isn't alone. The situation could be similar to most other smartphone brands like Honor, OPPO, Vivo, and Xiaomi.

Samsung Electronics’ Digital Appliances division, which handles home appliances, and its Visual Display division, which covers TVs and monitors, are also expected to struggle. The two divisions could record a combined loss of around KRW 200 billion (around 133 million) this year, similar to last year’s performance. To reduce costs, some employees may be reassigned, and certain senior staff members could be encouraged to take early retirement.

As part of its emergency measures, Samsung has ordered a 30% reduction in expenses across all its divisions. The company has reportedly introduced stricter travel policies. Previously, Samsung DX executives below the vice president level were allowed to fly business class. Under the new rules, they must travel in economy class instead for flights shorter than 10 hours.