Samsung Hits Record $62B Profit on AI Boom as Mobile Unit Posts First Deficit
AI chip demand drives record corporate profits while soaring component costs hit low-margin smartphones.
An unprecedented surge in memory component costs driven by global artificial intelligence demand has created a striking financial divergence for Samsung Electronics, pushing its mobile unit into the red even as the conglomerate posted record-breaking overall quarterly earnings.
Driven by extraordinary demand for memory chips, Samsung recorded an all-time high quarterly consolidated revenue of 171.5 trillion won ($119 billion), representing a 28 percent year-over-year surge. Consolidated operating profit reached a record 89.5 trillion won ($62.2 billion), lifting earnings per share for common and preferred stocks by 52 percent. According to financial coverage by Reuters on technology markets, chipmakers supplying high-performance memory have benefited from massive infrastructure spending by cloud and AI providers.
However, that semiconductor boom exacted a heavy toll on Samsung’s Device Experience (DX) division, which encompasses its mobile, television, and consumer electronics units. The division logged its first-ever quarterly operating loss of 800 billion won ($544 million). The downturn was primarily concentrated in the Mobile eXperience (MX) sector, where rising component expenses eroded profit margins despite solid top-line revenue growth.
The margin squeeze disproportionately affected lower-cost devices. While premium devices such as the Galaxy S26 Ultra and Galaxy Z Fold 8 maintained profitability, budget models faced severe pressure. Popular entry-level hardware, including the Galaxy A series, typically operates on thin profit margins that were entirely consumed by elevated DRAM and storage component prices.
Conversely, Samsung’s Device Solutions (DS) Division—which produces the silicon components used across the tech industry—reported a 56 percent quarter-on-quarter increase in revenue. Its Memory Business achieved record quarterly sales and operating profit, underscoring how Samsung’s semiconductor division effectively capitalized on the market dynamics squeezing its smartphone operations.
To mitigate ongoing margin compression, Samsung plans to focus heavily on high-value-added products in future quarters. Industry analysts expect broader price increases across the smartphone market, with budget and mid-range devices in the $200 to $500 range likely to experience the most significant percentage price hikes.
