Memory Now Eats Half a Cheap Phone. So Samsung and Apple Are Cutting Orders — From Samsung

中文版 Chinese version

The order-cut figures come from unnamed industry sources cited by the Korea Herald and Electronic Times on October 26, 2026; neither Samsung nor Apple has confirmed them. Samsung Display’s revenue concentration is from its audited 2025 financial statements. Treat the cuts as reported, not announced.

Two reports, one morning, one cause

On Monday, October 26, 2026, South Korea’s two main business outlets published matching accounts of the same retreat:

The Korea Herald reported that Samsung Electronics’ mobile division has asked suppliers to reduce fourth-quarter component deliveries by 20–30% versus earlier plans, and that Apple has cut October orders for certain iPhone 18 Pro and Pro Max components by 15–20% — during the flagship launch window, when orders for high-end OLED panels normally rise. The Herald noted Samsung usually trims production ahead of a Galaxy S launch, but called these cuts “steeper than expected.”

Electronic Times (ETNews), citing supply-chain sources briefed October 25, narrowed the Samsung cut: fourth-quarter production of the Galaxy A series is set about 20% below the plan made earlier this year — roughly 10 million fewer phones on a full-year view, with a further cut of more than 10% under consideration for next year. Galaxy A is not a side line: it accounts for about 70% of Samsung’s 230–240 million annual smartphone shipments.

The stated cause in both reports is identical: memory prices. ETNews reports that on some midrange and budget phones, memory semiconductors now make up more than half of total production cost. Asia Daily’s summary of the same reporting puts a number on the violence: an 8GB DRAM + 256GB NAND combination that cost $35 in Q3 2025 costs $140 in Q3 2026 — a 4× increase in twelve months.

The circular firing squad inside Samsung

No company embodies this crisis like Samsung, because Samsung sits on every side of it at once:

• Its semiconductor division is posting record profits selling DRAM and NAND into the AI data-centre build-out — the demand that quadrupled that $35 combo.
• Its MX (mobile) division buys memory at those prices, has reportedly swung to losses this year, and is now cutting the volume line that keeps Samsung No. 1 in global units.
• Its display division sells the screens for both Samsung phones and iPhones — and gets squeezed from both directions.

That third leg is where October 26 gets dangerous. Samsung Display’s audited 2025 accounts show two customer groups — widely understood to be Apple and Samsung Electronics — generated 40.4% and 22.4% of revenue respectively: 62.8% combined, ₩18.66 trillion (about $14.1 billion). When both customers cut orders in the same quarter, the damage is worse than the volume math: as the Herald’s industry source put it, weaker factory utilisation raises the fixed cost of every panel, and losing premium iPhone panels degrades the sales mix — the question is not how many fewer panels, but which ones.

ETNews adds the strategic consequence: Samsung is redirecting scarce components toward higher-margin Galaxy S and Galaxy Z flagships. And the global ranking is suddenly in play — Counterpoint estimated in August that Samsung would finish 2026 first worldwide, ahead of Apple by 0.1 percentage point. A 20% cut to the line that is 70% of your volume can erase a 0.1-point lead by itself. The background market is already brutal: IDC’s Q3 tally put global shipments at 255.3 million units, down 22% (Counterpoint’s Q3 read: down 20%, the weakest Q3 since 2012).

Why this is the end of something, not a bad quarter

This site has tracked chipflation category by category: console prices at record average tickets (September’s Circana data), PC shipments crashing, the RTX 5090 effectively vanishing from retail. Phones were the holdout because phones had scale, long-term memory contracts, and — in Samsung’s case — their own fabs. October 26 is the holdout falling, and it falls in a specific order that should worry everyone below the flagship line:

1. Midrange dies first. A flagship can pass a $100 memory bill to a buyer who finances over 36 months; a $250 Galaxy A cannot pass a bill that is now half its production cost. ETNews’ reporting that Samsung is weighing weaker displays and cameras at higher prices for future models is the sound of the value segment being hollowed out.
2. Volume is being sacrificed deliberately. Both Samsung reports describe a choice: fewer, richer phones over more, cheaper ones. That protects margin per unit and abandons the installed-base race — the same trade the console industry made, arriving at the same destination.
3. The supplier of the crisis is also its victim — and still wins. Samsung the group nets out ahead: memory profits are group profits too. The pain is distributed to phone buyers, component suppliers, and Samsung Display’s P&L. The AI build-out does not just compete with consumer hardware for chips; on October 26 it started eating the consumer business of the very company selling it the chips.

The number to remember is not the 20% cut. It is $35 → $140. Until that combo price bends back down, every category of consumer hardware — consoles in September, PCs, and now the phone in your pocket — is paying rent to the data centre.

Sources

• The Korea Herald (via The Investor), “Samsung Display faces profit squeeze as Apple, Samsung cut orders,” October 26, 2026 (Samsung −20–30% Q4 deliveries; Apple −15–20% October iPhone 18 Pro components; Samsung Display 40.4% + 22.4% = 62.8%, ₩18.66T / $14.1B, audited 2025 accounts).
• Electronic Times (ETNews), reported October 26, 2026, via industry coverage (Galaxy A Q4 −~20%, ≈10M units/year, >10% further cut weighed for next year; memory >50% of some midrange BOMs; Galaxy A ≈70% of 230–240M shipments; parts redirected to Galaxy S/Z; IDC Q3 255.3M, −22%; Counterpoint 0.1-point global lead estimate).
• Asia Daily summary of ETNews reporting, October 25, 2026 (8GB DRAM + 256GB NAND: $35 in Q3 2025 → $140 in Q3 2026; proposed 2027 OLED Galaxy A target of 100M vs 120M initially planned).