Samsung Navigates Economic Headwinds: Emergency Measures Amidst RAM Price Surge

Samsung Electronics is implementing stringent cost-cutting measures, including downgrading travel arrangements for executives, as rising semiconductor and logistics costs threaten profitability. This move comes despite reported strong pre-order numbers for the upcoming Galaxy S26 series, signaling broader economic pressures within the smartphone industry.

RAM Price Increases and Industry Impact

The global smartphone market is currently grappling with a significant increase in RAM prices, driven by high demand from the artificial intelligence (AI) sector and data centers. This surge in memory chip costs, coupled with rising prices for components like displays and chipsets, has forced Samsung to enact what it terms “emergency management.” According to a Samsung official, the company’s Mobile Experience (MX) division is facing “severe cost pressures” due to these factors. Android Authority reports that the MX business unit’s operating profit margin is projected to decline from 11% in the first quarter of 2025 to approximately 3% in the first quarter of 2026, potentially falling further to around 2% by the second quarter of 2026.

Cost-Cutting Measures

To mitigate these financial challenges, Samsung’s Device Experience (DX) division, which includes the MX unit, has mandated a 30% reduction in overall costs. Specific measures include:

• Travel Expenses: Executives below the vice president level will now be required to fly economy class for business trips under 10 hours, a change from the previous policy of providing business class seats.
• Workforce Adjustments: The company is considering reassigning employees to different internal business units and offering voluntary retirement packages.

Galaxy S26 Pricing Outlook

Despite the challenging economic climate, recent leaks suggest Samsung may attempt to maintain pricing for the Galaxy S26 series at levels similar to those of the Galaxy S25 series, at least in European markets. This indicates Samsung may be absorbing increased material costs to avoid passing them on to consumers. The S26 Ultra models, specifically the 256GB and 512GB versions, may even notice a price reduction of approximately 100 Euros, while the 1TB model is expected to maintain its current price point.

Internal Conflict Over Memory Supply

An internal dispute within Samsung regarding DRAM supply has further complicated the situation. Android Headlines reported in December 2025 that Samsung’s semiconductor division (DS) initially rejected a long-term supply request from the mobile division (MX), forcing the latter into quarterly negotiations for memory chips. The DS division is prioritizing high-margin contracts, such as High Bandwidth Memory (HBM) and specialized LPDDR chips used in AI accelerators, to maximize profitability. The cost of 12GB LPDDR5X RAM has more than doubled in the past year, rising from approximately $33 to around $70.

Galaxy S26+ Specifications

The Samsung Galaxy S26+ is expected to feature a 6.7-inch display, the Snapdragon 8 Elite Gen 5 chipset, a 4900 mAh battery, and options for 256GB or 512GB of storage with 12GB of RAM. GSMArena details the phone will run Android 16 and be protected by Corning Gorilla Glass Victus 2.

Industry Implications

Samsung’s response to these economic pressures is seen as a bellwether for the broader smartphone industry. If the world’s leading Android phone manufacturer is facing significant challenges, other brands are likely to experience similar difficulties. The situation highlights the increasing importance of cost management and supply chain resilience in a volatile global market.