Samsung is reportedly making 20% fewer Galaxy A phones this quarter

Memory prices have been skyrocketing for a while now, and that has been eating into smartphone makers' margins. Samsung's mobile division in particular isreportedly facing its first-ever annual loss. Today, a new report out of Korea claims the company is responding by cutting Galaxy A production in the fourth quarter of the year (October to December) by about 20% compared to its original plans. Samsung has allegedly already passed the reduced volumes on to its supply chain. One industry source reportedly claims component orders for Q4 are down about 20% from the production plan Samsung drew up early this year, which works out to around 10 million fewer units for the full year. Another source claims the cuts won't stop there, as Samsung aims to make at least 10% fewer Galaxy A devices next year too.

As for why, memory now apparently makes up over half the cost of some budget phones. On top of that, materials for key components such as PCBs and MLCCs are being prioritized for AI chips, which are much more lucrative. Samsung had kept Galaxy A production steady so far, thanks to having easier access to raw materials than Chinese brands. With no end to the shortages in sight, though, it's said to be shifting parts and materials to its more profitable Galaxy S and Galaxy Z flagships. Unfortunately, this could end up hurting buyers too. An industry insider warns that lower production may lead to higher prices, and that new phones could launch with downgraded displays or cameras while still costing more than their predecessors. That's in line with whatCounterpoint warned about back in March. Source(in Korean)