You may have grown tired of hearing about the global chip shortage by now but there's no escaping reality. There's an incredible semiconductor shortage that's delaying everything from phones, laptops, gaming consoles and GPUs to cars.
Even though it's one of the leading semiconductor manufacturers, Samsung has also been impacted by the chip shortage. Its new laptops are still hard to find in many countries. The company has also had to shake up its smartphone plans for 2021 due to the shortage.
Samsung had confirmed quite early this year that it won't release a new Galaxy Note flagship in 2021 due to the chip shortage. That was a big decision by the company. The Galaxy Note series consistently ranks among the best selling Samsung phones. It has a very dedicated customer base that swear by the phablet.
Yet the company has decided to take a gamble and not give them a new Galaxy Note this year. We have also heard that the Galaxy S21 FE launch has been delayed to Q4 2021. The chip shortage is the main reason why Samsung's affordable flagship won't be launching earlier as it was supposed to.
Like Samsung, other companies are also have to deal with the shortage. Its semiconductor division is likely doing all that it can to ensure that customers who have contracted chip manufacturing to Samsung are able to receive them. If that requires devoting more production capacity to customers at the expense of fewer chips being supplied to Samsung's own mobile division, so be it.
Samsung wants to increase its market share in the contract semiconductor manufacturing industry. It's a very lucrative business and there's a lot of room for Samsung to grow there. It also has contractual obligations to customers who are paying Samsung to manufacture their chips. Perhaps that's why Samsung's mobile division isn't able to get the amount of chips that it needs.
This has forced the mobile division to switch up its plans for the year. Instead of playing it safe, it decided to take a very gutsy approach during a worldwide chip shortage. Samsung is going all in on foldable smartphones. Evidently, it wanted to ensure that the chip shortage won't impact its foldable smartphones.
So it scrapped the Galaxy Note 21 series and delayed the Galaxy S21 FE, risking the obscene amount of money these devices would have made in the process. If anything, this demonstrates the seriousness with which Samsung believes foldables to be the future of smartphones.
The company already feels pretty confident that the upcoming Galaxy Z Fold 3 and Galaxy Z Flip 3 are going to perform very well in the market. It expects to ship 7 million units combined of the new devices. Both devices are in mass production at rates that are already breaking Samsung's previous records. It just can't make them fast enough, it seems.
The shortage also presents Samsung with an opportunity to establish itself as a true trailblazer in the industry. Other OEMs are struggling due to the shortage as well. They're playing it safe and not launching groundbreaking new products. There's still no real competitor for Samsung's foldables in the market.
That's why it's so impressive what Samsung is doing. It might sound like high praise but think about it. Is there any other OEM risking as much as Samsung has just to bring something new to the market? In our view, this gutsy move makes Samsung the clear winner, at least as far as driving innovation is concerned. Even during a pandemic and a global chip shortage, instead of playing it safe, Samsung is showing rivals how it's done.