Samsung May Cut Production by 30% as Phones Struggle to Make Money

Samsung's smartphone business is grappling with heavy losses despite strong shipment numbers, according to a new report. The company, which has returned to the top of the global smartphone market in Q2 2026, according to Counterpoint Research, is struggling to make money due to sharply higher RAM and storage prices. Money Today, citing industry sources, claims Samsung has asked suppliers to prepare for a 20% to 30% reduction in smartphone production during Q4 2026, down from the previously expected 270 million units.

The primary issue lies in memory pricing, with Samsung reportedly paying $145 for a 12GB LPDDR5X memory chip this year, a 175% increase from the previous year. Samsung has attempted to offset these costs by increasing smartphone prices for flagship models like the Galaxy S26 and Galaxy Z8. However, the mobile business still appears unable to generate a profit, as Samsung's mobile division recorded its first quarterly loss in Q2 2026, amounting to approximately $476 million.

While Samsung's semiconductor division, which benefits from soaring memory prices, has generated record profits, the situation remains challenging for the smartphone division during Q3 and Q4 if memory prices continue to rise.