reported on April 22 that as artificial intelligence-related demand continues to engulf global RAM production capacity, the smartphone industry is facing pressure from rapidly rising costs. Samsung’s concerns about this have further deepened, and it has even begun to warn that its mobile business unit may suffer its first annual loss in history.
Reports pointed out that Samsung’s mobile business unit has maintained profitability for a long time in the past, so once a loss occurs, it will be regarded as a major turning point in the company’s management level. As early as March this year, it was reported that Samsung had initiated some cost-cutting measures within the mobile phone business department because the company was already worried that the department might record an operating loss for the first time.
The latest report from South Korea states that this risk now seems to be gradually evolving from outside speculation to a more realistic internal corporate alarm. According to sources, TM Roh, head of Samsung's mobile business, has expressed concerns about the "possibility of a full-year deficit in the MX business unit." According to the report, previous reports that Samsung's mobile phone business may turn a loss came more from market speculation and external analysis. Now, even the company's top core leaders have publicly expressed concerns, indicating that the relevant situation is already quite serious.
From an industry perspective, RAM and memory prices continue to rise, which is pushing up the manufacturing costs of new smartphones, putting the entire smartphone market in turmoil. In particular, Android phones, which focus on low-priced phones, have been more obviously affected, and the related price increase trend has even been described as "inevitable."
In fact, cases of terminal price increases have begun to appear on the market. According to reports, some brands, including Motorola, have increased the prices of their products, and Samsung itself has also experienced price increases, which further illustrates that upstream storage cost pressures are gradually being transmitted to the end market.
Overall, as AI demand continues to squeeze memory supply and the cost of key mobile phone components is high, the profitability pressure on Samsung’s mobile phone business is significantly increasing. If the related trends are difficult to alleviate in the short term, whether Samsung's mobile business can maintain its consistent profit record is becoming the focus of the market.