What you need to know
- Samsung has reportedly asked its suppliers to delay shipments of certain components.
- In some cases, the tech giant has also apparently reduced its procurement orders.
- The orders that have been postponed are said to include chips, electronics parts, and product packages.
The worsening global economy appears to be having a knock-on effect on Samsung's suppliers. A new report from Nikkei Asia says the tech giant has slashed or delayed its procurement orders from suppliers.
According to the report, Samsung has informed suppliers across multiple product lines that it will be suspending orders for specific components and parts for several weeks while it evaluates its inventory levels of parts and final products.
Samsung also told other suppliers that it would reduce component orders as it struggles with "swelling inventories and global inflation concerns," the report states.
This is in line with an earlier report from South Korea's business newspaper Maeil Business News, which claimed that Samsung had reduced its smartphone production target for 2022. The tech behemoth has reportedly notified its suppliers that it would trim its order volume halfway through 2022. This means Samsung plans to ship only 280 million units this year versus its initial target of 310 million.
Nikkei reports that Samsung is cutting back on component orders for TVs, home appliances, and smartphones. Meanwhile, the delays will affect components across processors, electronics parts, and final product packages, according to the report.
One supplier is reportedly scaling down its planned shipment to Samsung by 50% for the month of July.
Android Central has reached out to Samsung for a statement and will update this article when we receive a response.
The latest move by Samsung signals growing concerns among phone makers as global inflation continues to rise. Xiaomi, Vivo, and Oppo have also tuned down their orders by at least 20% as several parts of China have been locked down due to resurging COVID-19 cases and the projected waning demand from the European market.
