Samsung Significantly Drops Smartphone Production Amid Coronavirus
Korean electronics giant Samsung has massively reduced the volume of its smartphone production in response to the spread of the novel coronavirus, according to a report from its home country. Samsung is said to sometimes only buy half as many parts as usual.
According to a report by the Korean portal ETNews, Samsung has recently significantly reduced orders for components for the production of various smartphone models. The company is allegedly responding to the considerable drop in demand for its mobile devices as a result of the crisis surrounding the coronavirus.
Specifically, there is talk of a drop in the order volume for smartphone components by up to 50 percent, with an average of around 20 to 30 percent fewer components being ordered. According to the report, this statement refers to the month of April. Production planning at Samsung is also said to have been changed in the meantime so that significantly lower quantities are planned for the next six weeks.
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Sources at the suppliers of Samsung components are said to have confirmed the changes in order volume and production quantities. The problem for the suppliers is above all the enormous quantities that Samsung normally purchases. Many companies are actually specialized in fulfilling Samsung’s huge parts orders, since the group produces a good 300 million devices annually, making up a lion’s share of smartphone manufacturers.
Due to the fact that orders have now been dropped, many suppliers are facing very difficult times because, due to the lack of alternative customers, they can hardly get rid of the components in any other way. A similar picture is currently likely to prevail among many other manufacturers of smartphones and other electronic devices, which of course also affects suppliers directly.
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