Samsung to Reduce Galaxy A Series Production by 20 Percent in the Fourth Quarter

Samsung has decided to cut Galaxy A series smartphone production by 20 percent in the fourth quarter due to rising component costs and record increases in memory prices. The company is targeting an additional reduction of at least 10 percent next year.

The increase in chip and component costs in the smartphone market is pushing manufacturers toward strategic decisions. Industry reports indicate that following record increases in memory prices, Samsung's mobile division could face the risk of annual losses. Seeking to alleviate this pressure, the tech giant is implementing restrictions on the high-sales-volume Galaxy A series.

According to industrial reports from South Korea, Samsung reduced its Galaxy A production volume by approximately 20 percent in the fourth quarter, covering October through December, compared to its early-year plans. This cut means approximately 10 million fewer devices produced for the entire year. It is stated that restrictions will not end here and an additional cut of at least 10 percent is targeted for next year.

Comprising models such as the Galaxy A57, A37, and A17 5G, the Galaxy A series accounts for 70 percent of Samsung's total smartphone shipments. It is evaluated that the company, which ships 230-240 million units annually, imposing production restrictions on these budget-friendly models could affect its market leadership.

Memory costs account for more than half of the total cost of budget-friendly phones. Raw material sources for basic components such as PCBs and MLCCs are being redirected to artificial intelligence chip production. Although Samsung keeps Galaxy A production balanced with supply advantages, it chooses to shift parts to the high-profit-margin Galaxy S and Galaxy Z series.