Samsung reportedly can’t make a profit on its phones, so it’s cutting production by millions
The company would rather sell fewer phones than make them at a loss.
Samsung is reportedly planning to cut its smartphone production in the fourth quarter due to low profitability. According to Android Authority, the company's smartphones are generating little to no profit after accounting for rising memory and semiconductor costs. As a result, Samsung is asking suppliers to cut production by 20% to 30% in the fourth quarter.
The news comes as Samsung reported a record quarterly operating profit of 107.4 trillion won for the third quarter, driven by strong demand for its semiconductors. However, Yonhap News notes that this profit was largely due to its semiconductor business, and does not provide details on the profitability of its smartphone division.
The production cuts are aimed at adjusting to the challenging market conditions, but the exact impact on Samsung's overall business is unclear. The company's revenue for the third quarter was estimated to have risen 126.6% from a year earlier to 195 trillion won.
Brief written by urgent.news from Android Authority, Yonhap News — 2 reports on this story. Machine-written — may contain errors; check the original before relying on it.
