Samsung May Cut Production by 30% as Phones Struggle to Make Money

Samsung has posted solid smartphone shipment numbers in recent quarters and even returned to the top of the global market in Q2 2026, according to Counterpoint Research.

Key points

• According to Funds Today, citing industry sources, Samsung has asked suppliers to prepare for a 20% to 30% reduction in smartphone production during Q4 2026.
• Samsung reportedly paid around $145 for a 12GB LPDDR5X memory chip this year, representing an growth of concerning 175% compared with a year earlier.
• While some recent flagship models have received increases of up to $100, the Galaxy S26 series and Galaxy Z8 foldables introduced at higher costs.
• The division reportedly generated an operating profit of KRW 53.7 trillion in Q1 2026.
• While estimates suggest operating profit may have exceeded KRW 100 trillion in Q3, that figure rose to KRW 89.2 trillion in Q2.

Notably, a new report claims Samsung's smartphone business is struggling to create capital as sharply higher RAM and storage rates rise the cost of producing phones. Samsung Galaxy S27 Will Finally Obtain a Redesign.

Before the documented cut, Samsung was anticipated to manufacture around 270 million smartphones this year.

That figure could now fall to roughly 200 million units. The biggest difficulty appears to be memory pricing.

Samsung reportedly paid around $145 for a 12GB LPDDR5X memory chip this year, representing an growth of concerning 175% compared with a year earlier. Higher Phone Rates Did Not Assist. Samsung has already responded to rising costs by increasing smartphone rates.

While some recent flagship models have received increases of up to $100, the Galaxy S26 series and Galaxy Z8 foldables introduced at higher costs. Older flagship devices and mid-range phones have additionally become more expensive.

Despite those increases, Samsung's mobile business is reportedly still struggling to generate a profit.

Meanwhile, the situation could become even more tough if memory costs continue rising.

DRAM rates are anticipated to climb another 20%, with the cost of some components potentially reaching around $180. Samsung Mobile's First Quarterly Loss.

Samsung's mobile division reportedly recorded its first quarterly loss in Q2 2026.

For context, the company's Device eXperience division posted a loss of around $544 million, with the mobile business accounting for approximately $476 million.

Current market conditions could put even more pressure on the division during Q3 and Q4. Samsung's New Flagship Tablets Obtain Dimensity 9500 and Galaxy AI. Memory Business Making Record Profits. The situation is particularly different on Samsung's semiconductor side.

Its Device Solutions division. It includes memory chips and semiconductors, has benefited heavily from soaring memory rates.

For context, the division reportedly generated an operating profit of KRW 53.7 trillion in Q1 2026.

This creates an unusual situation for Samsung: the same memory cost increases hurting its smartphone business are helping generate record profits for its semiconductor division. Stay Connected with ProPakistani.

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For now, samsung May Cut Production by 30% as Phones Struggle to Make Money remains the part of the story worth watching, and further updates are likely as more details are confirmed.