Report: Rising chip costs could push Samsung’s mobile division toward its first-ever loss despite Galaxy S26’s success

Compared to other flagship phones Samsung has ever released, the Galaxy S26 has reportedly performed strongly since its went on sale in March. Despite this impressive growth, Samsung’s mobile division may, for the first time, face a financial crisis.

According to a report from FNNews, Samsung Electronics has placed its mobile unit, Samsung MX, under emergency management. The unit is part of Samsung’s Device Experience (DX) section, which also oversees home appliances, mobile, and TV products. Other DX units were already operating under similar measures.

FNNews reports that the tech company attributed the financial crisis to the rising cost of memory semiconductors used in manufacturing these phones. Within a year, the prices of these chips have risen by over 850% across the memory semiconductor industry.

The rapidly rising chip costs are chipping away at profitability. Last year, operating profit was about $8.62 billion, but could drop to $3.34 billion in 2026. Compared to the first quarter of 2025, the profit margin could fall from 11% to 3% by Q1 2026. By the end of 2026, it might be near impossible to record even a 1% profit or avoid a deficit, according to insiders that FNNews spoke with.

To manage the situation, Samsung is making some financial adjustments. Employees who have been working for longer years are urged to retire earlier, while travel itineraries of less than 10 hours must now be in economy class, rather than business class.