Samsung Desperate For Components Mobile Boss Flies To US
Senior Samsung management who are desperate for mobile components similar to Apple, have made two trips recently from South Korea to the USA in an effort to secure supplies of application processors needed in their Galaxy smartphones as well as their A Series devices.
It now appears that Mobile boss TM Roh was denied, access to additional components with shortages of both Apple and Samsung devices set to be hit running into 23022.
According to South Korean trade site TheElec h Roh made two trips to the USA in March and another in July.
Roh was accompanied by a vice president who has been told to only return to South Korea once he resolves the issue.
The Samsung president also “harshly” admonished another senior vice president who is the head of component purchases according to Samsung insiders who have leaked information to media sources.
The vice president who remained in the US for three months returned to South Korea this month.
A Samsung spokesperson said their trips were not totally unsuccessful with Samsung able to secure some volume supply of components.
Samsung who are currently trying to wean themselves away from Chinese suppliers is also looking for new suppliers of components while also investing in production capacity in both Vietnam & India.
Smartphone production at several brands have been affected by the shortage in the third quarter and expected to continue into the fourth quarter.
Sources claim that Samsung’s reliance on original design manufacturers in China contributed to the position they are now in.
Chinese manufacturers currently account for up to 20% of Samsung’s phone production. China’s Wingtech manufactured Galaxy A6S in 2018 and Galaxy A01 in 2019. It is planning to manufacture Galaxy M02 this year.
Other manufacturers such as, Huaqin, manufacture the Galaxy A02.The shortage of chips has caused Samsung to reduce its planned smartphone production.
Apple is also in the same position as Samsung with the US iPhone maker recently warning investors and shareholders that supply chain issues could impact iPhones and iPads.
During the recent earnings call, Apple CEO Tim Cook and CFO Luca Maestri revealed that constraints within the supply chain could have a serious impact on Apple revenues in the fourth quarter and that the iPhone and iPad were most likely to be hit.
Luca Maestri said: “We expect supply constraints during the September quarter to be greater than what we experienced during the June quarter. The constraints will primarily impact iPhone and iPad.”
Galaxy S series is expected to sell under 30 million units this year.
Samsung is also not launching the Galaxy Note series this year.
Its foldable, Galaxy Z Flip 3 has taken off in Australia.
Samsung is expected to ship 260 million units to 270 million units of smartphones this year, down from its earlier estimate of 290 million units to 300 million units, due to the chip shortage and production shutdowns in Vietnam from the pandemic.