Samsung's MX division, responsible for its smartphones, may face its first-ever annual loss due to skyrocketing prices of DRAM and NAND memory, which are significantly impacting production costs. Analysts predict that the bill of materials for flagship phones, priced above $800, could increase by $100-$150, with memory accounting for 23% of costs for RAM and 18% for storage. Despite these challenges, the Galaxy S26 series has performed exceptionally well, breaking pre-order records in South Korea, the United States, and Europe, with the Galaxy S26 Ultra being the most popular model. In Q1 2023, Samsung shipped 62.8 million smartphones, marking a 3.6% increase compared to the previous year, even as the overall market contracted. However, the rising costs of memory and flagship chipsets, driven by increased demand from AI applications, pose a significant threat to the division's profitability.