Samsung could cut smartphone output by a third this year
South Korean technology company Samsung may reduce smartphone production by as much as 30%. The reason is rising memory component prices, which are squeezing profit margins in its mobile division.
South Korean technology giant Samsung is considering a substantial cut to its smartphone production this year, according to Kursors.lv. The reduction could reach as much as 30%, or roughly one third. The company aims to limit losses and bring its inventories under control.
Profits shrink despite sales
Samsung has recently managed to sell a considerable number of high-end smartphones. Even so, its mobile device division is facing a significant fall in profit margins. A profit margin shows how much of each sale's revenue remains as profit.
Memory prices push up production costs
Making smartphones has become considerably more expensive because prices of memory components are climbing sharply. These parts are needed to build the devices, so their higher cost directly raises production expenses.
The source describes the output cut as a possibility rather than a confirmed decision. It says the original forecast was different, but the rest of that statement is not available in the excerpt.
