Samsung is reportedly scaling back smartphone production as rising memory costs put pressure on profits, even as the company remains one of the world’s largest handset makers by shipment volume.
While Apple is said to be benefiting from strong iPhone demand and healthier margins, Samsung’s mobile business appears to be facing a tougher environment. A new report from South Korea claims that Samsung has asked its suppliers to reduce smartphone production by around 20 to 30 percent, largely due to the sharp increase in DRAM pricing.
The issue highlights a major challenge in the smartphone industry: selling hundreds of millions of devices does not always guarantee strong profits. Samsung ships phones across nearly every price range, from entry-level Galaxy A models to premium Galaxy S and foldable Galaxy Z devices. However, when key components become significantly more expensive, margins can quickly shrink, especially on mass-market models where pricing is highly competitive.
According to the report, the cost of 12GB LPDDR5X RAM has risen dramatically this year. Samsung is believed to be paying around $145 to $146 for the component, which represents an estimated 175 percent increase compared to the previous year. That kind of price jump can have a major impact on smartphone profitability, particularly for devices that rely on advanced memory configurations.
The situation may become even more difficult if DRAM prices continue to climb. Industry estimates suggest memory costs could rise by another 20 percent in the third quarter, potentially pushing the price of the same 12GB LPDDR5X RAM package to around $180. If accurate, that would create additional pressure on Samsung’s mobile division and could explain why the company is reportedly taking a more cautious approach to production.
Despite the reported production cuts, Samsung is still expected to ship around 270 million smartphones in 2026. That remains a massive figure and would keep the company firmly among the top global smartphone brands. Maintaining high shipment volume may also help Samsung defend its market share against Apple and fast-growing Chinese smartphone makers.
Samsung’s broader business could still benefit from rising memory prices, since the company is also one of the world’s biggest memory chip manufacturers. Its semiconductor division may see improved performance from the same DRAM price increases that are hurting its smartphone unit. However, that does not necessarily solve the problem for the mobile division, where higher component costs can reduce device-level profitability.
One important detail remains unclear: the report does not specify how much money Samsung may be losing, if any, on individual smartphone models. Since Samsung sells such a wide variety of devices at different prices and profit margins, the financial impact likely varies across its lineup. Premium models may absorb higher memory costs more easily, while mid-range and budget phones could be more vulnerable.
For now, the reported production cut should be viewed with some caution until more concrete financial data becomes available. Still, the situation reflects a growing challenge for smartphone makers in 2026: balancing shipment volume, component costs, and profitability in an increasingly competitive market.
