Samsung has started to worry about the profitability of its mobile business in early 2026 as the cost of key components continues to rise. The company depends heavily on memory chips and semiconductors for its smartphones, and those parts have become significantly more expensive. As a result, Samsung’s mobile division faces pressure that could affect its operating profits during the first quarter of the year.
Rising component prices have created uncertainty across the smartphone market, and manufacturers now face higher production costs for nearly every device they build. Analysts expect memory prices to climb even further in 2026 after already increasing sharply during the previous year. When production costs increase at this pace, phone makers often pass part of that cost to consumers, which raises concerns about higher smartphone prices in the near future.
According to a report from Hankyung, Samsung executives have grown increasingly concerned that the company could even post an operating loss in its mobile business. The report says Samsung has started discussing cost-cutting steps to manage the pressure created by higher semiconductor prices.
Cost cutting inside Samsung’s mobile division
Samsung’s Device Experience division, which oversees smartphones, televisions, and home appliances, has begun reviewing spending across the organization. One of the first actions involves reducing overseas travel expenses for executives, with business class travel reportedly being replaced by economy seats for many trips.
At the same time, the company still sees strong demand for its newest flagship phones. Samsung recently reported that the Galaxy S26 series recorded strong pre-orders in South Korea and that pre-orders in the United States increased by 25 percent. The Galaxy S26 Ultra accounts for most of those early orders, which shows that consumer interest in premium devices remains strong even as production costs rise.
The coming months will show how rising memory prices affect Samsung’s mobile business and the broader smartphone market.
