Business · Companies · 2 days ago
Samsung may cut smartphone production as rising memory costs erase profits
Samsung is reportedly considering a major cut to its smartphone production through the end of 2026.
The company had planned to make about 270 million phones this year, but production could fall to just over 200 million.
The main pressure is the rising cost of memory chips, including RAM used in smartphones.
A 12GB RAM chip is reported to cost about 175% more than it did a year ago, with further increases expected.
Samsung has raised prices on some phones, but its mobile business is still reportedly making no profit on smartphone sales.
The company’s memory-chip business is also highly profitable, but that does not prevent higher component costs from weighing on its phone division.
The reported production cut would take effect in the fourth quarter, though Samsung has not confirmed the details in the information provided.
Samsung is reportedly asking suppliers to cut smartphone production by 20% to 30% in the fourth quarter of 2026.
The reported cuts follow a sharp rise in memory costs, including a 175% increase in the price of a 12GB RAM chip compared with a year earlier.
Samsung’s original 2026 production plan was about 270 million smartphones, but reports say output could fall to just over 200 million.
The reports say Samsung’s mobile business is struggling to make a profit despite recent price increases and strong sales.
Samsung’s memory-chip business, by contrast, has reported record operating profits.
- Who
- Samsung, according to reports citing industry sources.
- What
- The company is reportedly asking suppliers to reduce smartphone production by 20% to 30%.
- When
- The reported cuts are planned for Q4 2026.
- Where
- Not stated.
- Why
- Rising memory and component costs are reportedly squeezing the profitability of Samsung’s smartphone business.
This story does not have two clearly opposing sides.
no profit at all
Samsung’s mobile division reportedly recorded a loss of about $476 million.
Samsung had planned to make around 270 million smartphones, according to the reports.
Samsung reportedly asked suppliers to cut smartphone production by 20% to 30%.
- Reported production cut
- 20% to 30% in Q4 2026
- Original 2026 production plan
- Around 270 million smartphones
- Revised 2026 output estimate
- Just over 200 million smartphones
- 12GB RAM chip price increase
- About 175% compared with a year earlier
- Mobile division loss in Q2 2026
- About $476 million
Sources
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