SEOUL, October 11 — Samsung Electronics is reportedly cutting smartphone production by 30% for the second half of 2024, according to recent media reports citing internal discussions and supply chain sources. The reduction comes as the South Korean tech giant faces declining profitability amid slowing global demand, rising component costs, and increased competition in the smartphone market. Industry analysts note the move is aimed at aligning production with current economic conditions and focusing on more profitable business segments.
According to officials familiar with the matter, the production cut will particularly affect mid-range and budget smartphone models, which have seen declining sales despite Samsung’s continued dominance in the global market. The company reported a net profit of 10.7 trillion won (about US$8.1 billion) in the first quarter of 2024, but has faced pressure from a slowdown in China, a historically key growth driver.
Samsung has not officially confirmed the reduction, and the company has not commented publicly on the reports. However, supply chain sources indicate the decision is part of a broader effort to reduce inventory levels and improve financial performance amid broader economic headwinds affecting consumer spending. Analysts note the cut reflects a strategic shift toward innovation in next-generation technologies, including AI-powered devices, 5G, and foldable smartphones, which Samsung has been heavily investing in as potential drivers of future growth.
The move underscores the challenges even market leaders face in navigating a saturated and rapidly evolving industry. While Samsung’s smartphone division remains a critical contributor to overall revenue, the company is now prioritizing differentiation to maintain its leadership position.
Industry insiders suggest the production adjustment is part of a restructuring effort focused on enhancing long-term profitability and sustainability. Looking ahead, market watchers will monitor whether Samsung’s renewed focus on premium and innovative segments can offset volume declines in traditional smartphone categories, particularly as it navigates shifting demand across Asia and global markets.
