Samsung Electronics is set to produce just over 10 million smartphones in April 2020, which is about half of its previous monthly average of around 25 million handsets, according to Samsung suppliers on April 13.
Annually, Samsung produces up to 300 million handsets. "There is still quite a bit of inventory left over from March due to the coronavirus, and plants in India and Brazil have been shut down as well,” said one source, explaining the reasoning behind the cut. “Logistics alone, it doesn’t make sense to churn out more than necessary.”
Samsung usually produces the bulk of handsets during the first quarter of the year to secure enough inventory. Then, the company places further orders depending on demand after April. Therefore, it usually produces less than the monthly average for the first quarter during the month of April.
But this April, production may be even lower than usual due to the sluggish global economic conditions triggered by the virus outbreak.
On the other hand, companies like Apple and Huawei that have had trouble in production due to the situation in China, are getting ready to produce more handsets. These companies have been avidly securing MLCC and other parts even during the peak of the coronavirus in order to prepare for when things turn back to normal. .
“Samsung Electronics plans to bring production volume back to normal in May after its plants in India and Brazil are normalized,” said another source. “But it may take longer than expected for things to get back on track.”
The Indian government said on April 12 that it would be expanding the country lockdown by two more weeks to April 30, while the number of coronavirus patients in Brazil are on the rise.
Meanwhile, local smartphone suppliers believe their sales would bottom out in the second quarter of this year, with orders rising in the following third quarter. Most market research firms are forecasting global smartphone makers to ship 10% or more less of handsets this year.
The Elec is South Korea’s No.1 tech news platform.