Samsung Prioritizes Memory Capacity for AI Customers, Squeezing Its Galaxy Smartphone Business

Samsung Electronics operates both a memory-chip business and the Galaxy smartphone franchise. As generative AI data centers expand, high-bandwidth memory, or HBM, and server DRAM are delivering better returns than memory used in smartphones. The semiconductor division is therefore prioritizing AI customers, leaving even Samsung’s own Mobile eXperience, or MX, division facing higher costs and supply pressure.

As of July 20, 2026, reports warned that Samsung’s smartphone business could post its first-ever net loss and that rising memory prices could also push up the price of the Galaxy S26. Samsung Electronics has not announced the S26’s launch date, pricing or the size of any increase, but the shift in capacity toward higher-value AI orders has become a key factor driving up smartphone costs.