Key Takeaways
- Samsung Electronics is expected to report a record-breaking profit for Q2 2026.
- However, its mobile division may suffer from a KRW 1.5 trillion loss or $364 million to $729 million.
- Memory chip prices have surged, benefiting Samsung’s semiconductor business but hurting its smartphone division.
Samsung Electronics is set to report record-breaking profits for the second quarter of 2026, with an estimated operating profit of KRW 89.4 trillion or approximately $58.44 billion, marking a significant 19-fold increase from the previous year. However, this strong overall performance may be overshadowed by potential losses in its mobile division.
According to DealSite South Korea analysis, Samsung’s MX division could report anything from a KRW 1.9 trillion profit to a KRW 1.5 trillion loss for Q2 2026. The most likely estimate suggests a loss of $364 million to $729 million. This potential loss is particularly concerning as it would be the first in Samsung’s smartphone business history.
The main driver behind Samsung's overall strong performance is its semiconductor business, which has benefited from the sharp rise in memory chip prices. Reuters reported that DRAM and NAND prices continued to increase during Q2 2026 due to expanding demand beyond high-bandwidth memory into conventional memory products. This surge in memory prices has significantly boosted Samsung’s earnings.
However, this same memory boom is hurting Samsung's smartphone business. The company’s mobile division relies heavily on DRAM and NAND flash storage for its phones. As these components become more expensive, the production cost of each device rises. Market analysis cited by Sammy Fans indicates that DRAM’s share of premium smartphone component costs has increased from 14 percent a year ago to 23 percent.
NAND flash storage costs have also continued to move higher, further increasing the overall production expenses for Samsung's smartphones. Analysts believe that even though the Galaxy S26 series has reportedly performed strongly, these higher component costs may not be enough to offset the increased expenses. Sammy Fans reported that some analysts now believe that these higher component costs were fully reflected in Q2 2026, weakening the MX division’s profitability.
Samsung had already warned earlier this year about cost pressures on its mobile business. In its Q1 2026 results, the company said the MX and Networks businesses posted KRW 38.1 trillion in revenue and KRW 2.8 trillion in operating profit but also mentioned that the MX business would pursue efficiency measures to reduce the impact of rising costs.
The potential loss for Samsung’s mobile division is especially significant because it would suggest that component inflation is now creating pressure even stronger than one of Samsung’s worst mobile product crises, such as the Galaxy Note7 battery crisis in 2016. During that time, Samsung's IT and Mobile Communications division’s earnings declined due to the discontinuation of the Galaxy Note7, with its operating profit dropping almost 98 percent to 100 billion won.
Samsung has not yet released full results for Q2 2026, but analysts are closely watching the potential impact on the company's overall financial health. The upcoming earnings report is expected to provide more clarity on the division’s performance and any measures Samsung might take to mitigate these challenges.
