The smartphone industry is facing a surge in component prices, especially RAM, driven by strong demand from the AI sector. According to reports, Samsung Electronics has entered “emergency management” as rising semiconductor, display, chipset and logistics costs put pressure on profits.
This comes despite record pre-orders for the Samsung Galaxy S26 series, which reportedly surpassed those of the Samsung Galaxy S25 lineup. Market forecasts suggest Samsung’s Mobile Experience (MX) division could see its operating margin fall from 11% in Q1 2025 to around 3% in Q1 2026, potentially dropping even further later in the year.
To cut costs, Samsung’s Device Experience division has reportedly ordered a 30% spending reduction. Measures include downgrading many executives’ business trips from business class to economy and possibly reassigning staff or encouraging voluntary retirement. Analysts warn that if the world’s largest Android phone maker is under such pressure, smaller smartphone brands could face even greater challenges.
Source: Android Authority
