Samsung Galaxy phones may now be selling at no profit at all, according to a startling new report from Korea. The claim comes as Samsung is said to be cutting smartphone production by up to 30 percent through the final quarter of 2026, a drastic pullback driven by soaring memory prices. For UK buyers, the news explains why Samsung Galaxy no profit margins are already pushing prices higher, and why they could rise further still.
Korean media outlet MoneyToday reports that Samsung originally planned to produce around 270 million smartphones in 2026, but may now barely surpass 200 million. The shortfall of roughly 70 million units amounts to one of the most dramatic production cuts in the company’s recent history, and it lands at a time when the Galaxy S26 and Galaxy Z Fold 8 ranges are supposed to be in full swing.
Why Samsung is cutting Galaxy production
The culprit is memory. The report points to a 175 percent surge in the price of 12GB of RAM since last year, with a further rise of around 20 percent expected in the third and fourth quarters alone. Memory prices are climbing because of fierce demand for DRAM and HBM semiconductors from the AI industry, which is outbidding phone makers for chip capacity.
There is an irony here that Samsung itself must feel keenly. The company is one of the world’s largest memory manufacturers and is riding the AI boom to a reported $80 billion group profit estimate for the third quarter. Yet its mobile division has to buy memory at market prices just like everyone else, and the mobile unit is expected to post a 19 trillion won loss for Q3 2026, roughly $14 billion.
According to the report, Samsung has asked its component suppliers to reduce delivery volumes by 20 to 30 percent, which directly translates into fewer phones rolling off production lines in the final quarter of the year. Q4 is typically a quieter period for Samsung anyway, as launches age out and attention shifts to the following year’s flagships, but a cut of this size goes far beyond seasonal adjustment.
What no profit means for Galaxy buyers in the UK
The claim that Samsung is making no profit at all on Galaxy smartphones is presumably a generalisation. Premium models such as the Galaxy S26 Ultra and Galaxy Z Fold 8 almost certainly still generate some margin, while budget phones in the Galaxy A series are far harder to sell without losing money. But the overall picture is clear: component costs have risen so fast that the mobile division is struggling to stay above water.
That goes a long way towards explaining Samsung’s recent price increases. The company officially raised Galaxy S26 prices by $100 earlier this year, and our earlier reporting on the Galaxy S26 price hike for UK buyers showed where the rises were landing. When margins are this thin, every cost increase has to be passed on, and there is no cushion left to absorb the next one.
For shoppers in the UK, the practical effects could include:
- Further price rises on Galaxy S26 and A series models if memory costs keep climbing
- Tighter stock of popular models in the run-up to Christmas as production volumes shrink
- Fewer aggressive discounts and bundle deals, since there is no margin to fund them
- A harder choice between upgrading now and waiting for next year’s Galaxy S27 range
If you were planning to pick up a Galaxy S26 or a Galaxy Z Fold 8 before Christmas, buying sooner rather than later could prove wise. We covered the Galaxy S26 price hike for UK buyers earlier this year, and the direction of travel since then has only been upwards.
Samsung’s mobile division in crisis
The second quarter of 2026 was reportedly the first time Samsung’s mobile business slipped into the red, and the third quarter is shaping up to be dramatically worse. The mobile division’s losses stand in sharp contrast to the AI-driven boom in Samsung’s chip business, which is earning record profits from exactly the memory shortage that is strangling phone sales.
Analysts have long noted a shift in consumer behaviour: buyers are holding onto phones for longer and upgrading less frequently. The report suggests that waiting is becoming the default choice, which compounds Samsung’s problem. Fewer upgrades mean fewer sales over which to spread rising costs, which means thinner margins, which in turn forces higher prices that encourage yet more people to wait.
Breaking that cycle is now Samsung’s biggest challenge heading into 2027. The Galaxy S27 range will arrive into a market where memory is still expensive, rivals are holding prices steady where they can, and consumers have learned to wait. Whether Samsung can protect its mobile margins without alienating buyers will define the company’s year.
For now, the takeaway is stark: the era of generous Samsung discounts and comfortable margins may be over, at least for a while. If you spot a good Galaxy deal in the coming weeks, it may be worth grabbing, because the report suggests Samsung simply cannot afford to keep offering them.
