Samsung’s mobile unit is in ’emergency’ mode, despite record S26 pre-orders

The smartphone industry is facing a RAM crisis as memory prices skyrocket, while other components are also seeing price hikes. Now, it turns out that mobile juggernaut Samsung is taking radical measures.

FNN News reports (h/t: Jukan05 on Twitter) that Samsung Electronics has entered “emergency management” due to rising semiconductor and logistics prices. The AI sector’s demand for RAM has led to unprecedented price increases, while components like displays and chipsets have seen price hikes too. It also comes amid the US-Israeli war in Iran, which has seen rising oil prices as a result.

“With cost pressures severe due to rising semiconductor prices and the increasing burden of logistics costs, the MX business unit has ultimately been forced to enter an emergency management system,” a Samsung official told the outlet.

FNN News also reports that Samsung’s Mobile Experience (MX) division is projected to see its operating profit margin drop from 11% in Q1 2025 to ~3% in Q1 2026, citing market forecasts. It’s believed that this could further drop to ~2% from Q2 2026, while some Samsung employees apparently think even a 1% profit margin will be tough to achieve. In other words, it’s entirely possible that Samsung’s mobile unit posts a deficit.

So what steps will be taken with emergency management? The outlet reports that the Device Experience (DX) division, which includes the MX unit, has ordered a 30% reduction in costs.

Samsung has also apparently made major changes to flights for employees:

Previously, all executives below the vice president level in the DX division were provided with business class seats for business trips with flight times of less than 10 hours; however, starting today, they will be assigned economy class seats to cut costs.

Finally, it’s predicted that Samsung might reassign employees to different internal business units and push for some workers to take voluntary retirement.

The fact that Samsung is taking such drastic measures amid growing flagship phone sales isn’t a good sign at all for the rest of the industry. If the world’s number one Android phone maker is feeling the economic pinch, then less popular brands clearly aren’t safe by any measure.