Samsung Electronics’ Device eXperience (DX) Division has placed its smartphone business under emergency management because of a sharp deterioration in profitability amid rising semiconductor costs, weak demand, and intensifying competition
According to a source-based report by FNNews (Financial News, South Korea), Samsung Electronics has placed its smartphone business under emergency management. Similar measures have been taken in Samsung’s TV and home appliance businesses, showing a bigger structural stress across its consumer-facing divisions.
Executives cite surging memory prices and AI-related component costs as the immediate trigger.
Roh Tae-moon, head of the DX Division, acknowledged that rising DRAM prices are directly impacting product pricing. Industry estimates show that there is an increases of around 150–180% in DRAM prices recently. As reported, the Galaxy S26 lineup has seen price increases of over 400,000 won (~₹25,000) and the Ultra 512GB variant crossed 2 million (~₹125,000) won for the first time.
Despite these hikes, internal concerns suggest that higher shipment volumes could actually deepen losses due to elevated bill-of-material costs.
Margins under severe pressure
The Mobile eXperience (MX) Division, which maintained operating margins of around 10–11% last year, is now expected to fall to 2–3%, with downside risk toward 1% or even losses, the report suggested.
In response, Samsung has initiated cost-cutting and workforce optimisation measures, including voluntary retirement programmes, tighter expense controls, and restructuring.
Travel policies have been downgraded, budgets reduced, and labour tensions are emerging around job redesign and incentives.
The contrast
While its semiconductor-focused Device Solutions Division is benefiting from a memory upcycle, the DX Division is facing stagnation.
This divergence points to a broader structural shift in the smartphone industry, where rising component and memory costs are suppressing the margins overall.
Now considering the Indian market, other brands like Oppo, Vivo, OnePlus, Realme, and iQOO account for a huge market share, yet have no DRAM or NAND production of their own. They are operating as assemblers. If Samsung, despite of their own manufacturing, is under pressure, imagine how severe can implications be for the other.
