Samsung may cut smartphone production by 30 million units due to Russia-Ukraine war: Report
Three main reasons for this smartphone production cut are -- decline in demand for smartphones globally, ongoing electronic component shortage and the Russia-Ukraine war.
Updated:Sat, May 28, 2022 7:56pm
Samsung is reportedly planning to cut down its smartphone production by around 30 million smartphone units this year. This cut is likely to impact both, its medium-budget smartphone portfolio and its flagship smartphones.
According to a report by a Korean news publication, Samsung is cutting down the production of smartphones in low-mid budget segment and premium-budget smartphones due to three main reasons, which include a decline in demand for smartphones globally, ongoing electronic component shortage and the Russia-Ukraine war.
Furthermore, the report says that the Korean electronics giant earlier planned to manufacture around 310 million smartphone units in 2022. But now, the company has revised its production target to 280 million smartphone units, which is around 10 percent less than the target it had set last year.
Quoting a researcher at Shinhan Financial Investments firm, the publication said that as of now the company is in the process of adjusting its inventory as per the revised targets. The researcher also estimates a 35 percent decline in smartphone production in the second quarter of the year compared to the January-April quarter. "...If we look at the entire second quarter production, we expect a 10 percent decline compared to the previous quarter," the researcher told the publication.
In addition to smartphones, Samsung has also amended its orders at its electronic component manufacturing companies as the above-mentioned factors are also likely to hits its components business. The company reportedly has amended its order to reduce its volume by up to a month as far as its components manufacturing companies are concerned.
As far as the foldables are concerned, Samsung is planning to increase the volume of its foldable display smartphones later this year. The company is planning to sell around 18 million foldable display smartphone units this year compared to 13 million units.
Separately, Samsung is also planning to exit the feature phone market in India to focus on launching phones above Rs 15,000. As per a report by ET Telecom, the has already spoken with its channel partners and they are ready to exit the Indian feature phone market by the end of this year. The move is primarily linked to the PLI scheme, which requires the company to manufacture phones at a minimum factory value of Rs 15,000 to be eligible to get the benefits.