July 31, 2026, 6:37 am | Read time: 3 minutes
In the second quarter of 2026, Samsung recorded an operating loss in its mobile division for the first time since records began in 2011. Although the smartphone business is booming, the increased costs for components could not be offset–even though Samsung manufactures them itself.
First Loss in 15 Years
The latest quarterly report reveals that Samsung’s MX division (Mobile eXperience), along with the network business, generated nearly 20 billion euros in revenue. Although the mobile division increased its revenue compared to the previous year, it recorded an operating loss of 426 million euros.
Samsung’s DX division (Device eXperience), which includes smartphones, TVs, and household appliances, reported a total loss of 486 million euros. Smartphones thus account for the majority of the deficit.
Samsung cites the specific cause in the report. Despite “solid sales figures for the Galaxy S26 series and continued strong demand for the Galaxy A series […] profits declined due to the industry-wide increasing cost pressure on components.” This refers to the skyrocketing prices for memory, driven by the expansion of data centers for AI applications.
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Memory manufacturers are focusing their capacities on producing so-called HBM chips, which are optimized for AI processes and significantly more lucrative than conventional RAM for consumer devices due to the high demand for computing power.
Samsung itself is one of these memory manufacturers. Accordingly, the company achieved a 56 percent increase in revenue with the Device Solutions (DS) division and the memory business compared to the previous quarter. With more than 77 billion euros in revenue and 54 billion euros in operating profit, it is once again a record quarter for Samsung:
“The memory business achieved another record quarter by proactively meeting AI demand despite limited capacities, focusing primarily on server products. The ongoing industry-wide upward trend in prices also contributed to the record result.”
99.7 percent of Samsung’s total billion-euro profit comes solely from Device Solutions. The million-euro deficit in the MX division is thus hardly significant.
Can Samsung Counteract?
It seems somewhat odd that the DS division manufactures the memory chips for which the MX division has to pay much higher prices. However, this is not unusual, as the individual business divisions compete with each other. The memory business also aligns with the demand of the server industry–and this has a significantly larger volume than Samsung’s smartphone business.
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In the current quarterly report, the company outlines plans to strengthen the MX business. The focus is primarily on leading in artificial intelligence through “personalized and intuitive experiences.” Samsung also aims to expand its market share by growing in the flagship segment with the S26 series and the recently introduced Z8 series. Smart glasses with AI integration are also expected to further strengthen the premium segment.
Additionally, the company is working on solutions to increase efficiency to minimize the impact of rising costs. One possibility is optimized RAM usage, which reduces the need for more memory chips.