Samsung Electronics is initiating a reduction in smartphone production within its MX division. The company aims to decrease output by up to 30% by the end of the fourth quarter. This strategic shift is driven by the significant rise in memory chip prices, which has negatively impacted the profitability of the smartphone business.
The company has already requested that its supply chain partners cut component deliveries by 20% to 30%. While the memory chip division benefits from these high prices, the smartphone unit faces declining margins or potential losses. Samsung has not specified which models will be affected, suggesting a potential across-the-board reduction.
Recent shipment data highlights the downward trend in production volumes. In the first and second quarters, Samsung shipped approximately 62.4 million and 62.7 million smartphones, respectively. Third-quarter shipments are estimated at 59 million units, with a further decline to 52 million units projected for the fourth quarter.
