Samsung shuts down smartphone production

The Corona crisis and the Ukraine war have not only resulted in immense human suffering. The two humanitarian states of emergency have also had a serious impact on the global economy. This is due in particular to major supply chain problems, which are reflected above all in high inflation. Now Samsung, as a globally known company, has to take a drastic step. Namely, the South Korean tech company is forced to cut back its smartphone production by 30 million units as it expects demand to shrink.

Sales are expected to shrink

Samsung itself should probably have no problem maintaining its production output. However, there is no point in producing too many devices if demand is expected to fall. The company does not only focus on a certain smartphone series. Starting with inexpensive entry-level devices of the Galaxy A series up to the high-priced Galaxy S models, all devices are supposed to be affected. The reasons are obvious, but Samsung is transparent and once again points out the typical causes. War, the consequences of a pandemic and the resulting inflation have such a serious impact that the original production target had to be deviated from. Actually, the South Korean tech company specializing in consumer electronics wanted to produce 310 million smartphones in 2022. Since this target is proving to be unrealistic and not economical, it is now to become 280 million devices.

Giant differences from the previous quarter

For Samsung, this is a real downturn after celebrating huge successes just a few months ago. It was only in April that the electronics company was able to announce that its own profits had risen by over 50 percent. Samsung’s smartphone division was also among the winners. These highs are probably over now for the time being. In order not to leave too much scorched earth behind, the company has decided not to produce any slow sellers. This is not only the case for Samsung’s smartphone division. Apple also openly communicated only two months ago that it would produce fewer smartphones. However, the Californians are only focusing on the iPhone SE3. However, it remains to be seen whether the US company will also expand the production cut.