Samsung has been selling phones for decades. Through economic downturns, brutal competition from Apple and Chinese rivals, and a global chip shortage, its smartphone division kept making money. Until now. According to SamMobile, Samsung’s mobile arm just posted a loss for the very first time in its history, and the culprit is something most consumers wouldn’t think to blame: the price of memory chips.
Samsung Electronics released its Q2 2026 earnings report, and the headline number looks great on the surface. The company overall posted record-breaking profits, mostly thanks to surging memory chip prices. But dig into the device side of the business and the picture flips completely. Samsung DX, the division that runs both smartphones and TVs, reported a loss of around KRW 800 billion, which works out to roughly $544 million. The bulk of that, about KRW 700 billion ($476 million), is on Samsung MX, the unit responsible for smartphones, tablets, laptops, smartwatches, and wearables.
Here’s the painful irony. Samsung makes memory chips. It sells memory chips. And those same chips, now priced sky-high, are eating into the margins on every phone it builds. When your component costs spike and you can’t pass the full increase on to consumers without killing demand, your profits take a hit. Samsung tried to cushion the blow by pushing more premium products, including the Galaxy S26 series, and tightening up operational efficiency. It wasn’t enough.
The wider device business at Samsung isn’t doing much better. The Visual Display and Digital Appliances divisions, which cover TVs, monitors, and home appliances, posted a combined loss of KRW 10 billion, around $6.8 million. So the TVs aren’t saving anyone either.
The one bright spot in Samsung’s non-chip portfolio is Harman, the audio and connected car tech company Samsung acquired back in 2017. Harman pulled in a profit of KRW 400 billion ($272 million) this quarter, driven by its digital cockpit solutions for vehicles and its lineup of consumer audio brands:
- JBL
- Harman Kardon
- AKG
- Bang and Olufsen Automotive
- Mark Levinson
- Infinity
- Arcam
That acquisition is looking like a smart long-term move right now. Car tech and premium audio aren’t going anywhere.
But back to the phones. This is a genuinely big deal. Samsung’s mobile division isn’t some scrappy startup. It ships hundreds of millions of devices a year and competes at every price tier. A loss at this scale, driven entirely by input costs rather than weak demand, signals a structural problem that won’t fix itself quickly. If memory prices stay elevated, Q3 could look just as rough or worse.
For consumers, the knock-on effect could mean even higher phone prices down the line as Samsung tries to rebuild those margins. The Galaxy Z Fold 8 and Z Flip 8 are already expensive. Don’t be surprised if the next mid-range lineup quietly creeps up in price too. Samsung isn’t going to absorb these losses forever.