Samsung has reportedly cut down the production of smartphones in April following the COVID-19 outbreak and the subsequent fall in demand for mobile phones. The company could be planning to ramp up the smartphone production back to normal starting next month.
According to the South Korean tech publication The Elec, Samsung will manufacture just 10 million smartphones this month, which is less than half of its monthly average of 25 million units. The information comes by the way of Samsung's suppliers.
Looming economic recession, lockdowns, and logistical issues are the reasons
The global smartphone leader usually manufactures more than 300 million smartphones every year, but that number will take a dip in 2020 due to the coronavirus outbreak and the lockdown of industries as a part of social distancing measures taken by all the countries.
Samsung's smartphone plants in Brazil and India have been shut down, and the company still has quite a bit of inventory left over from its March production. So, it makes sense not to manufacture more units than necessary, especially looking at the looming economic recession.
The South Korean firm usually produces a bulk of smartphones in the first quarter and then places further orders in April after gauging the demand. As a result, it produces fewer smartphones in April, but the production in April 2020 will be even lower. The Indian government has extended the nationwide lockdown for three weeks more, and the number of COVID-19 affected patients in Brazil and India is rising.
South Korean smartphone suppliers believe that the demand for mobile phones will hit rock bottom in the second quarter of 2020, with the demand rising in Q3. Market research firms expect global smartphone shipments to fall 10 percent or more this year.