Despite the strong performance achieved by the Galaxy S26 since it was introduced to the market in March, reports indicate that Samsung’s phone division may face unprecedented financial pressures.
According to a report published by the FNNews website, Samsung Electronics has placed its phone unit, Samsung MX, under what looks like emergency management, which is the unit responsible for smartphones within the Device Experience sector, which also oversees home appliances and televisions.
The main reason for these pressures is the sharp rise in the prices of memory chips used in phone manufacturing, as data indicate that their cost rose by more than 850% within one year. This increase has begun to directly affect the profit margin.
Projections show the possibility of a decline in operating profits from about $8.62 billion last year to about $3.34 billion in 2026, with the profit margin falling from 11% to about 3% during the first quarter of the same year. Internal estimates indicate that profits may approach zero by the end of 2026 if costs continue to rise.
In an attempt to contain the crisis, the company began taking some financial measures, including encouraging long-serving employees to retire early, in addition to reducing travel expenses so that flights of less than 10 hours are booked in economy class instead of business class.
