Samsung’s mobile experience division chief TM Roh has told company leadership the business could suffer its first-ever net loss on smartphones in 2026, according to Ars Technica’s report citing South Korean outlet Money Today. This article is based on a single source; all figures and claims below derive from Ars Technica’s reporting. The warning stands out because Samsung has kept smartphone profits intact through every previous economic disruption — recessions, pandemics, and supply chain crises included.
The report attributes the pressure to AI compute demand. According to Ars Technica, demand for LPDDR5x memory from data center operators has tightened supply of components that also go into consumer phones, and the cost squeeze may prove deep enough to erase margins even as Galaxy S26 units sell well.
Memory economics have shifted
The report describes a structural shift in smartphone bill-of-materials. For most of the smartphone era, the application processor was the single most expensive component, with the display running a close second. The report says the AI era has upended that order.
According to Counterpoint Research figures cited in the report, RAM will account for more than a third of the build cost for a budget phone by mid-2026. On premium devices, memory still comes in above 20 percent of component cost. The report attributes the change to roughly a doubling in the price of DRAM and NAND.
Why AI infrastructure is the driver
The report traces the connection between data center investment and handset margins through LPDDR5x, the memory standard used in both mobile devices and a new class of AI server CPUs. According to the report, Nvidia’s Vera AI CPU — set to replace Grace later in 2026 — can carry up to 1.5 TB of LPDDR5x. A single rack-scale AI platform from Nvidia, the report states, pairs 36 Vera CPUs with 72 Rubin GPUs. The report notes that the CPUs in that one server would consume enough RAM to outfit roughly 4,600 Galaxy S26 Ultra handsets at 12 GB each.
The report says demand at that scale pulls supply from the consumer market and bids up prices broadly, with shortages already affecting consumer laptops and server hardware.
Historical context
The report frames Roh’s warning as notable because Samsung’s smartphone business has remained profitable through prior downturns including economic downturns, pandemic-era component disruptions, and carrier inventory corrections. It also frames the memory pressure as an industry-level problem rather than a Samsung-specific one. The report notes that Samsung, as both a major DRAM producer and one of the world’s largest smartphone makers, both supplies and consumes the commodity whose price is rising.
We did not seek comment from Samsung for this article, as this report relies entirely on Ars Technica’s sourcing from Money Today.