Samsung Electronics is reportedly cutting down its phone production by 30 million units this year, according to SamMobile, which cited a report from Korean publication Maeil Business News.
As per the report, three main reasons have been cited behind the South Korean tech giant’s move such as the decline in demand for smartphones globally due to the ever-increasing inflation, supply chain limitations, and the ongoing Russia and Ukraine war.
Initially, Samsung had set a target to produce 310 million units of smartphones in 2022 but it has now decided to reduce it to 280 million units, which is around 10 percent less than the target it had set last year.
This cutting of production targets includes all devices from low to mid-end smartphones to high-end, flagship models as well.
After producing 300 million units in 2017, Samsung Electronics has stayed in the mid-to-late 200 million range ever since. This is the first time in five years that the company had set a goal of producing 300 million units this year.
Quoting Park Hyung-woo, a researcher at Shinhan Financial Investments firm, the publication said that the company is in the process of decreasing its smartphone production in May by 35% compared to the average in the January-April quarter, which is expected to be a 10 percent decline.
Besides smartphones, the above-mentioned factors are also likely to hit Samsung’s electronic component manufacturing companies. The company has recently revised its order to reduce the amount of supply by up to a month.
Samsung is not the only company to be affected by the current market conditions. Last year, Apple Inc. cut down production of its iPhone 13 model for 2021 by as many as 10 million units due to the global chip shortage.
This year too the Cupertino giant has scaled-down smartphone production for 2022 by reportedly reducing the production of the iPhone SE (mid-low-end model) by 20%.
Samsung has yet to comment on the report.