Samsung earns 89.2 trillion won from chips and loses money on phones: a guide to the smartphone industry amid a memory shortage

Smartphone shipments fell 20% in Q3 to their lowest third-quarter level since 2012, as memory became roughly four times as expensive during 2026. We explain what goes into a phone and how it is priced, then trace where the money spent on memory went: who received it, who paid it and who deferred purchases, and rate the companies on the EL7 scale.

20%

Year-on-year decline in smartphone shipments in Q3 2026, with shipments at their lowest third-quarter level since 2012

70%

Increase in low-cost phone component costs in one year, with memory accounting for almost all of it

89.2

Trillion won in profit at Samsung’s chip division in Q2, out of 89.5 trillion for the group

8.5%

Xiaomi’s smartphone gross margin in Q2, down from 11.5% a year earlier

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EL7 Research · Industry Guide

12 October 2026 · Prices as of the 9 October close