The AI industry's demand for RAM has increased production costs for Samsung's Galaxy phones, leading the company to tighten budgets and strictly control employee benefits.
Samsung's mobile division, Mobile Experience, faces the risk of losses for the first time, despite strong sales of the Galaxy S26 Series in several countries.
However, profits must be offset by rising costs of memory components like RAM, driven up by AI industry demand—especially for LPDDR5X RAM used in supercomputers anddata centers.
It is estimated that a single AI supercomputer may use memory equivalent to 4,600 Galaxy S26 Ultra units, causing global memory prices to nearly double by early 2026. This has become a major factor, accounting for about 20 percent of the production cost of premium smartphones today.
In response, Samsung has announced emergency management measures, cutting operational expenses by 30 percent across the organization. Additionally, executives below the vice president level must downgrade from business class to economy class for short- and mid-range travel to conserve cash flow.
Meanwhile, the global smartphone market is slowing, with shipments down approximately 4.1 percent. Samsung finds itself in a difficult position, facing record-high production costs alongside sales that may not meet growth targets.