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After phones, Samsung now cuts production of TVs and home appliances

Business
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Last updated: June 24th, 2022 at 13:03 UTC+02:00

The global economic downturn has led to a fall in demand for products across most industries. Companies like Samsung are having to adapt. There have already been reports that the company is significantly cutting smartphone production.

It’s now facing similar pressures in other parts of the business. According to a new report, Samsung is also reducing the production of its TVs and home appliances now.

Global economic conditions affecting more parts of Samsung’s business

Reports from Korea citing industry officials who highlight that Samsung is cutting production of its TVs and other home appliances. It’s having to make these adjustments due to slow consumer demand because of the tough global economic conditions. The uncertainty due to the Russia and Ukraine conflict is also putting pressure on demand.

Market research also shows that inventory turn over for Samsung took 94 days on average in the second quarter of this year. That’s about two weeks more than last year. The inventory turnover time is the number of days that it takes for the inventory that’s in stock to be sold to customers. The cost burden of the manufacturer is lowered if the inventory turnover is shorter. Samsung’s figures show that these products are selling much slower than before.

A similar trend is emerging for Samsung’s smartphone business. A recent report mentioned that Samsung has 50 million unsold smartphones stuck with distributors. That’s about 18% of its expected total smartphone shipments for 2022. The company has reportedly cut its phone production for 2022 by 30 million units already.

Experts expect the global economic situation to get worse before it gets better. How long that would take is anybody’s guess right now.

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