Samsung is facing growing pressure from a memory market that is being pulled in two directions at once. On one side, demand from AI data centers and related hardware is driving up LPDDR and NAND prices; on the other, smartphone buyers are becoming more cautious as handset costs rise.
That combination is now putting Samsung’s mobile and semiconductor businesses under unusual strain. According to a report cited from South Korea’s MT Co, the company’s chip division may be headed toward its first-ever financial loss if the imbalance between supply and demand continues.
AI demand is reshaping memory allocation
The main force behind the price spike is the rapid expansion of AI infrastructure. Data centers and hardware built for AI workloads are consuming large volumes of RAM and NAND, and that demand is pulling capacity away from consumer electronics.
Samsung sits at the center of that supply chain because it holds more than 42% of the LPDDR market. With a position that large, any shift in global demand quickly affects how memory is distributed across different device categories.
The problem is not a weak position in memory. Instead, the issue comes from the scale of AI demand that Samsung is struggling to keep up with, especially from major players such as Tesla and Nvidia. As more stock is directed toward AI customers, less remains available for phones and other consumer devices.
Galaxy devices are feeling the pressure first
That tightening supply is starting to affect smartphones directly. Manufacturers that depend heavily on LPDDR now have to compete with AI customers that absorb far greater volumes of memory.
The scale of the shift was illustrated in the source article with a striking comparison. Samsung would reportedly need to sacrifice memory equivalent to 4,600 Galaxy S26 Ultra units equipped with LPDDR5X just to meet the RAM needs of one Nvidia AI supercomputer. The figure underscores how AI orders can dominate supply decisions.
As a result, memory for Galaxy phones becomes harder to secure and more expensive to source. That creates added cost pressure for Samsung’s own handset business, since the company is both a memory supplier and a smartphone maker.
Internal warning points to possible semiconductor loss
The strain has reportedly already reached Samsung’s leadership discussions. MT Co said TM Roh, who leads Samsung’s mobile division, has warned internal management about the possibility of the semiconductor business posting its first loss.
He was also said to have asked the board to prepare for the possibility of a full-year loss in the MX semiconductor division. That warning matters because Samsung has long been regarded as one of the strongest names in global chips, making a loss forecast especially notable.
If that scenario happens, the impact would go beyond higher component costs for phones. It would signal that the current memory market imbalance is now affecting one of Samsung’s core profit engines.
Higher memory costs are already reaching Galaxy pricing
The pressure is no longer limited to the supply chain. Samsung has already raised prices for several devices in South Korea, including the Galaxy Z Fold, Galaxy Z Flip, and Galaxy S25 Edge.
The increase is also spreading to more affordable models. Prices in the Galaxy A, Galaxy M, and Galaxy F lines have also gone up, showing that the effect of pricier memory is not confined to flagship phones.
That matters because higher prices tend to weigh on demand. When consumers see more expensive devices at the same time that budgets are tightening, purchases often slow down.
Demand is softening as costs rise
The timing is difficult for Samsung and the wider smartphone market. For manufacturers, component costs are climbing just as buyers are becoming more selective.
Counterpoint, as cited in the source material, reported that India’s smartphone market has already fallen by 9%. That decline adds more context to the challenge Samsung faces, because weaker demand can make it harder to pass higher costs on to consumers without hurting sales.
The result is a chain reaction that starts with AI demand and ends with pricier phones on retail shelves. Samsung is caught in the middle because its memory business benefits from the AI boom even as its Galaxy division absorbs the consequences.
A market squeeze that may not ease soon
For now, the pressure appears tied to a broader industry reprioritization rather than a short-term supply glitch. AI continues to absorb RAM and NAND capacity, and that leaves less room for consumer electronics makers that depend on LPDDR.
Samsung’s dual role makes the situation more complicated than for most rivals. It sells Galaxy smartphones, but it also supplies the memory components that are now being competed for by AI firms and consumer device makers alike.
As long as demand from AI remains strong, LPDDR prices are likely to stay elevated and supply for smartphones may remain tight. That leaves Galaxy pricing, handset margins, and Samsung’s semiconductor outlook closely linked to how memory is allocated between the AI market and consumer devices.