The AI industry has grown exponentially, but at the cost of gobbling up nearly all of the DRAM supply, leaving next to nothing for a multitude of manufacturers hailing from other businesses. Memory makers are also struggling to keep up with demand and may only meet 60 percent of the entire supply through 2027.
Samsung, being one of the firms to mass produce DRAM chips, appears to favor its short-term growth and profits over lending a hand to its DX (Device Experience) and MX (Mobile Experience) units, which are responsible for smartphone launches. According to the latest report, the situation is dire to the extent that the executive of both divisions, TM Roh, has warned that a possible annual deficit could materialize for the MX sector.
If the Samsung executive’s prediction comes true, it will be the first time the company’s MX division has witnessed an annual deficit since its inception
Soaring DRAM and NAND flash prices have already forced Samsung to introduce a price hike to its flagship smartphone series, the Galaxy S26, leading to a reduction in consumer spending. The Korean manufacturer has also reportedly halted production of LPDDR4 and LPDDR4X memory chips in favor of faster, more efficient, and more expensive LPDDR5 and LPDDR5X RAM for AI customers.
Despite LPDDR being a primary component in mobile devices, it has emerged as a core piece of the puzzle for the AI market, resulting in a massive shortage. For instance, NVIDIA’s next-generation AI CPU codenamed ‘Vera’ is said to be equipped with a total of 1.5TB of LPDDR5X memory. Considering that a single Galaxy S26 Ultra flagship unit ships with 12GB of LPDDR5X RAM, the cutting-edge AI processor’s memory requirement is 125 times larger, ultimately causing a shortage.
Samsung also had the liberty to prioritize its MX business unit by manufacturing cheaper DRAM chips for the Galaxy S26 series, but it appears that two business segments belonging to the same company don’t necessarily mean that they will work in favor of each other. Memory supply contracts are typically inked on a quarterly basis, and price increases that have continued since the second half of last year are expected to be fully reflected in manufacturing costs from the second quarter of 2026.
Counterpoint Research has also predicted that premium devices priced at $800 or more will feature DRAM whose cost will account for 20 percent of the total. In short, Samsung’s MX division will likely incur a loss before entering the recovery phase.
News Source: Money Today
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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