Samsung Plans to Cut 30 Million in Smartphone Production, Shutting Down LCD Panel Business

Samsung Plans to Cut 30 Million in Smartphone Production, Shutting Down LCD Panel Business 1

Samsung has reportedly cut its 310 million goal by 30 million and plans to shut down its LCD panels production.

The South Korean tech giant, Samsung, has reported they will be cutting down their smartphone production goal by 30 million units for the rest of 2022. The news broke in the Korean publication, Maeil Business News, and followed suite after its American competitor, Apple revealed their strategy to slash production of the iPhone SE by 20 million this year. Additionally, the company’s subsidiary, Samsung Display, may be shutting down its LCD panel production as it has failed to stay competitive with its competitors.

The main reason, based on the report, pointed to the difficulties tech companies have received due to the conflict in Russia and Ukraine, along with the ongoing pandemic efforts, supply chain issues with getting microchips and global inflation concerns. The tech giant reported a really strong first quarter, which made the 310 million production goal promising—especially with the successful redesigned look (the return of the mighty S-Pen) and performance of the Samsung Galaxy S22 series smartphones.

SKMBN quoted an official from a Samsung Electronics partner company, “Recently, Samsung Electronics received a call to reduce the order volume of smartphones from the current target of 310 million units to 280 million units…As of May, a strong inventory adjustment is confirmed. Smartphone production in May is expected to decrease by 35% compared to the average in January to April. % reduction is expected.”

Samsung Plans To Cut 30 Million In Smartphone Production, Shutting Down Lcd Panel Business 3

While Samsung has not officially reported on its production of LCD panels, reports from Sammobile have noted that Samsung Display would finally be ready to shut down its LCD production. The same report stated that the company may also be buying LCD panels from China now. Initially, they were supposed to shut down LCD production at the end of 2020 but reconsidered due to the potential demand of LCDs in the post-pandemic time.

Of course, the pandemic had continued through 2021, but the company was still hopeful that LCD sales would increase. However, the report noted that China and Taiwan had more affordable LCD panels and Samsung could not keep up with them. Also, the company was already planning to shift their LCD panels to Quantum Dot (QD-OLED) displays for their future goals anyway. This could mean that all of Samsung’s LCD production plants could be repurposed into OLED plants.

With the rapidly changing economic landscape, supply chain issues and consumers being more cautious of spending, Samsung and many other companies like Apple have scaled back their 2022 production goals to remain relevant but also prevent potential losses. The company said they would continue to monitor the markets closely before providing any additional updates regarding production on their S22 lineup and other products into the third quarter.

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