Samsung Sold More Phones Than Ever and Still Lost Money

Here's a sentence that shouldn't make sense. Samsung sold plenty of phones last quarter, grew its mobile revenue year over year, and still managed to lose money doing it.

The number is 800 billion won, roughly $544 million, and it's the first operating loss Samsung's DX division has ever posted. DX is the half of the company that makes things you actually buy: phones, TVs, appliances. The loss came almost entirely from the mobile side. And the reason is the one everybody in tech has been bracing for since last year. Memory got expensive.

The AI boom is eating your phone budget

Samsung's own explanation is careful corporate phrasing about rising component costs across the industry. Translated into plain language: RAM and storage now cost so much that a phone can sell well and still fail to turn a profit. Every AI data center going up right now is buying the same memory chips your phone needs, and there are only so many to go around.

Flagships came out fine. Samsung says the Galaxy S26 Ultra and the Z Fold 8 line held their margins, which tracks. When a phone costs $1,300, an extra $40 of memory is irritating but survivable. Budget phones are where the math collapses. Those already run on margins thin enough to see through, and there's simply no room to absorb a component spike.

What this means for your next phone

Samsung says it plans to focus on "high-value-added products" going forward. That is a company telling you, politely, that it intends to sell you more expensive things.

Expect prices to climb across the lineup, and expect the steepest percentage increases in the $200 to $500 range. That's exactly where most of the world buys phones. The people with the least room in their budget get squeezed the hardest, which is the part of this story worth being annoyed about.

This isn't a Samsung problem, either. Every Android maker buys memory from the same short list of suppliers, so the pressure lands on all of them at once. Google has already been rumored to raise Pixel prices this year for the same reason.

The part where Samsung wins anyway

Here's the twist: Samsung is one of those suppliers. Its Device Solutions division, the chip half of the business, posted a 56 percent quarter-on-quarter sales jump, and the memory business set all-time highs for both quarterly revenue and operating profit.

Company-wide, Samsung pulled in a record 171.5 trillion won (about $119 billion) in revenue, up 28 percent year over year, with operating profit at 89.5 trillion won. Earnings per share rose 52 percent.

So Samsung is losing money on phones because memory is expensive, and making record money because memory is expensive. If you own the stock, that nets out beautifully. If you just want a good $400 phone, it does not.

Which is the thing to keep an eye on. Samsung's phone division is currently being carried by the exact boom that's hurting it. That arrangement works right up until AI demand cools and the subsidy disappears, and nobody has a confident answer for what the phone business looks like on the other side of that.