[Edaily Reporter Han Kwangbeom ] SamsungElectronics(005930)While Samsung Electronics posted record-breaking earnings for the second quarter of this year thanks to the semiconductor boom, its MX (Mobile eXperience) division, which oversees the mobile business, slipped into the red due to rising costs caused by “chipflation.” The sharp rise in memory prices—which drove the semiconductor division’s record-breaking performance—has acted as a crippling cost burden for the MX division. Consequently, SamsungElectronics plans to make a last-ditch effort in the second half of the year to defend profitability and expand market share by launching the “Galaxy Z8” series and new AI form factors.
According to SamsungElectronics on the 30th, the MX division’s revenue for the second quarter of this year reached 32.3 trillion won, a 13.3% increase compared to the same period last year (28.5 trillion won). While the second quarter is typically an off-season when the impact of new flagship products wanes, the company maintained its position as the global leader in the smartphone market for the second quarter, thanks to steady demand for the Galaxy S26 series launched earlier this year and continued strong sales of the A series.
However, operating profit, which stood at 3.1 trillion won in the same period last year, turned into a loss of 700 billion won. “Chipflation”—driven by rising costs across the industry, including higher prices for global memory and core components—dealt a direct blow to profitability. Combined revenue for the MX and Network divisions, including the network business, totaled 33.2 trillion won, with an operating loss of 0.7 trillion won.
◇ Hit Hard by “Chipflation”… Second-Quarter Loss of 700 Billion Won
Daniel Araújo, Senior Vice President of SamsungElectronics’ MX Business Division, explained during the second-quarter earnings conference call (IR) held that day, “Due to memory supply shortages, smartphone market demand—particularly in the price-sensitive mid-to-low-end product segments—saw a year-over-year decline in unit sales. However, revenue grew thanks to an increase in ASP (average selling price) and an expanded share of flagship models.” He added, “Profits, however, declined due to factors affecting the entire industry, such as rising component costs.”
SamsungElectronics anticipates that rising memory prices and cost pressures will persist in the second half of the year and plans to seek a turnaround by expanding sales of high-value-added new products and optimizing resource efficiency. Executive Vice President Araújo stated, “Profitability deteriorated as the shortage of mobile memory and rising prices, driven by growing demand for AI servers, continued,” adding, “Since cost pressures are expected to persist in the second half of the year, we will implement various countermeasures.”
SamsungElectronics will first focus on growing its market share through its flagship models, led by the recently unveiled “Galaxy Z8” series. In fact, the Galaxy Z8 series is riding a wave of initial success, with sales via live broadcasts on the first day of domestic pre-orders more than doubling compared to the previous model, and the Galaxy Z Fold8 leading the way in sales. Major international media outlets, including Forbes, are also offering favorable reviews, calling it “the most polished foldable Samsung has ever unveiled.”
◇Z8, Tablets, and Watches All in Action… Strengthening the Flagship Lineup
SamsungElectronics plans to overcome the burden of rising component costs through supply chain optimization and strategic collaboration with partners, while boosting initial pre-order demand with differentiated promotions such as the “Double Storage” benefit and a free six-month subscription to “Google AI Pro.”
Additionally, the company’s strategy is to offset rising memory costs by expanding sales of premium devices and upselling higher-end models within the lineup. Executive Vice President Araujo emphasized, “While maintaining robust sales of the S26 series, we will successfully launch new premium products such as the Galaxy Tab S12 and Watch Ultra 2 alongside the new foldable series.” He added, “We will intensify sales efforts for higher-end models in the A series, such as the A57 and A37, and roll out core AI experiences to lower-end models to fill market gaps.”
The company also outlined a differentiation strategy in response to intensifying AI competition. SamsungElectronics is redesigning the mobile environment with an “AI OS architecture” where AI becomes the core of system operations, going beyond simply providing AI features. Building on its partnership with Google, the company plans to evolve toward “Agent AI” that understands user context and proactively suggests tasks, while expanding the AI experience across SamsungElectronics’ vast device ecosystem—including not only mobile and wearables but also TVs and home appliances.
◇“AI Glasses” Take Off… Chonbang Streamlining and Service Monetization
The company is also accelerating the introduction of new form factors. Through collaborations with global eyewear brands Gentle Monster and Warby Parker, SamsungElectronics will officially launch “Intelligent Eyewear,” a next-generation AI device, within this year. Executive Vice President Araujo explained, “While we are expanding the share of premium sales across our ecosystem products overall, we will also introduce new form factor experiences befitting the AI era through the launch of Intelligent Eyewear within the year.”
In particular, to overcome the decline in profitability caused by rising memory costs, the company unveiled a two-track plan to improve its business structure: optimizing resource efficiency across all areas—including procurement, sales, and development—and monetizing services over the medium to long term. Executive Vice President Araujo asserted, “We will minimize the decline in profits by strengthening resource efficiency initiatives across various fields, including procurement, sales, and development.”
Regarding the monetization of the services business, he added, “Based on our user base of hundreds of millions of Galaxy devices worldwide, we are focusing on creating premium value by providing tangible convenience—such as hyper-personalized experiences tailored to individual users’ contexts—rather than simply generating short-term revenue.” He continued, “We will implement this in phases, taking into account the maturity of the services and customer acceptance.”
