Despite strong initial sales since its March launch, the Galaxy S26 is now facing potential financial headwinds for its parent company, Samsung. The smartphone’s positive performance hasn’t been enough to offset rising costs and a shifting market.
According to a report from FNNews, Samsung Electronics has placed its mobile division, Samsung MX, under emergency management. This unit is part of Samsung’s Device Experience (DX) section, which also oversees home appliances, mobile products, and televisions, and follows similar measures already implemented in other DX units.
The financial concerns stem from a dramatic increase in the cost of memory semiconductors used in the phones’ manufacturing process. The price of these chips has surged by more than 850% across the memory semiconductor industry in the past year, FNNews reports.
This rapid increase in component costs is impacting profitability. Operating profit, which reached approximately $8.62 billion last year, is projected to fall to $3.34 billion in 2026. Profit margins could decline from 11% in the first quarter of 2025 to just 3% in the first quarter of 2026. Sources speaking with FNNews suggest that achieving even a 1% profit, or avoiding a deficit altogether, could be nearly impossible by the end of 2026.
In response to the situation, Samsung is implementing financial adjustments. Long-term employees are being encouraged to take early retirement, and business travel for trips under 10 hours will now require economy class seating instead of business class.
