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A report says Samsung expects its first annual smartphone loss, as AI demand pushes up the price of phone memory and storage.
In short: Samsung says it could lose money on its smartphone business in 2026 because key parts like memory and storage have gotten much more expensive.
A report from Korea’s Money Today, cited by Ars Technica, says Samsung’s mobile chief TM Roh warned company leadership that Samsung could face its first ever annual net loss in smartphones.
The main problem is the rising price of DRAM and NAND, which are the phone’s short-term memory and long-term storage (think of DRAM as a desk you work on, and NAND as a filing cabinet). These parts have become more expensive as companies race to buy more computing hardware for AI.
Ars Technica points to how extreme AI demand can be. A single high-end AI server design could use so much LPDDR5x memory that its CPUs alone would equal the RAM found in about 4,600 Galaxy S26 Ultra phones (at 12GB each). Counterpoint Research also estimates that by mid-2026, memory could make up more than one third of the cost to build a budget phone, and more than 20 percent even on pricier models.
There are already signs this is affecting retail prices. Samsung’s Galaxy A37 and A57 reportedly cost $50 more than the previous versions. Some higher-end models also went up, including certain Galaxy Z Flip 7 and Z Fold 7 storage options, plus a $100 increase for the Galaxy Tab S11.
Samsung may sell plenty of phones and still make less profit, or even lose money, if parts costs stay high. At the same time, Samsung’s chip business is benefiting from the same memory price surge, which could soften the impact for the company overall.
Source: Arstechnica