Samsung Soars with Semiconductors, but This Does Not Help the Mobile Division

Within the same company, an increasingly pronounced split is unfolding.

The South Korean giant Samsung is going through a period of extraordinary commercial success in chip and memory production, while the smartphone sector continues to struggle, trapped in a stalemate that appears hard to overcome.

This internal dichotomy is shaping a two-speed company, where profitability is concentrated almost entirely in a single department.

Samsung: Dream Q2 for Semiconductors, Mobile Sector Weak

Forecasts for the second quarter of this year depict an extremely unbalanced situation. According to information shared by the well-known leaker Ice Universe, the mobile division will record profit margins at the bare minimum.

Specifically, profits from smartphone sales will account for just 1% of those expected from the semiconductor division.

A yawning gap that highlights how the consumer electronics market is facing decidedly tougher challenges than the enormous global demand for silicon components.

The Corporate Pay Gap

This enormous difference in profitability is reflected directly, and in some respects drastically, on bonuses allocated to workers. Current estimates indicate that the company should reach an annual operating profit of around 300 trillion won.

Thanks to a new agreement, employees in the Semiconductors division will receive a special bonus equal to 10.5% of the group’s annual operating profits.

Practically, every employee focused on the memory division will take home a bonus of about 600 million won, the equivalent of about €350,000 in a single year.

Conversely, colleagues in the mobile division will receive markedly lower figures. For them, the performance bonus will cap at 6 million won, about €3,500.

This is a compensation 100 times lower than that of the semiconductor colleagues, a gap that effectively creates a clear economic hierarchy under the same corporate roof.

Cost Inflation and Its Impact on Users’ Wallets

The biggest challenge for the mobile division ironically stems from market dynamics that favor the other division. The tech sector is facing a strong “chipflation,” a dizzying rise in the production costs of memory chips.

An economic condition so impactful that even Apple publicly acknowledged that the current costs are now unsustainable, making an upward price correction inevitable.

In this macroeconomic context, the company is forced to plan an increase in list prices for its upcoming foldable devices, particularly the Galaxy Z Fold 8 and Z Fold 8 Ultra.

A retail price increase that risks further depressing consumer demand for these premium smartphones, potentially fueling the slowdown of the mobile division.