The global smartphone market is contracting, driven largely by rising memory prices. In this environment, Samsung’s mobile division — MX — is suffering heavy losses and is now expected to post an annual loss, with a cumulative risk exceeding $16 billion over the next few years. Still, Samsung as a whole is in a position to absorb the shock where others, like OnePlus, have been forced to withdraw from key markets.
A memory crisis weighing on shipments
Smartphone shipments are falling and a significant year‑on‑year contraction is forecast, largely because of pressure on DRAM and NAND prices. Those price increases are being driven in large part by surging demand from AI‑focused data centers, which are buying DRAM and NAND faster than manufacturers can ramp production. The result: higher component costs at the very heart of smartphone build bills.
OnePlus forced to rethink its global footprint
OnePlus’s strategy — offering high‑end specs at reduced prices — depended on low component costs. With memory prices rising, that model became unsustainable. The brand has announced a full exit from North America and pulls back from parts of Europe to refocus on China and India. Its U.S. shipments were already declining when market dynamics made maintaining those positions unviable.
Why Samsung is better able to weather the storm
Samsung is both a victim and a beneficiary of the same memory squeeze. The mobile division does not receive preferential pricing from the semiconductor unit: it faces the same market pressures as competitors. However, at the group level, record profits generated by the memory upcycle more than offset MX’s losses. So while MX is posting substantial losses, they remain marginal when viewed against Samsung’s consolidated balance sheet.
Divisions do not officially subsidize one another — partly to avoid questions of favoritism and regulatory scrutiny — which means the mobile division’s performance is still judged on its own results. Nevertheless, the group’s financial strength lets Samsung withstand several difficult quarters without resorting to the kind of market pullback seen at OnePlus.
Commercial pressures and implications for mobile business
The mobile division is already planning price increases across its foldable lineup slated for 2026, and rumors suggest a more expensive Galaxy S series the following year. Those hikes risk depressing demand at a time when inflation and falling purchasing power are worrying consumers, and the impact will likely be felt across the broader market, not only in premium segments.
Internally, the performance gap is also producing pay disparities: semiconductor employees reportedly received average bonuses of around $340,000, while bonuses in the mobile division were nearly non‑existent.
