Samsung Electronics plans to sharply cut smartphone production in the fourth quarter of 2026, according to Money Today as relayed by Gagadget. Shipments of more than 62 million units in each of the first two quarters are expected to drop to 52 million.
The reason is memory. Chips that are earning Samsung’s semiconductor business huge profits on the AI boom have become too costly for its own phones, making device production less profitable and in some cases loss-making. Samsung has already asked partners to reduce component supply volumes by 20 to 30 percent.
What it does to the annual plan
Total annual output could fall to 200 to 230 million units, against the 270 million originally planned. It is not yet clear which models will be hit hardest. Production may be limited evenly across the line, from budget phones to premium foldables.
Two divisions, two stories
Preliminary data put Samsung Electronics’ third-quarter 2026 operating profit at a record $80.2 billion, driven by demand for server and AI memory. For the mobile side the same boom means rising costs. The price of 12GB LPDDR5X RAM has climbed 175 percent over the year to about $145 per chip, and budget lines are not spared.
Samsung is passing some of that on to buyers. The Galaxy S26 Ultra now costs $100 more than the iPhone 18 Pro Max. The company still led the market with a 23 percent share in the second quarter, but further cost increases could force it to rethink its lineup. Engineers are already preparing the Galaxy S27 Ultra, in the hope that the chip situation will have eased by its release.
