According to the latest info, Samsung Electronics President and Head of Mobile Communications Department Lu Taiwen went to the United States twice this year to meet with major component manufacturers to ensure more supply of application processors needed for smartphone production, but it was rejected . This not only shows the severity of the current global chip shortage, but also shows that Samsung Mobile’s purchasing power in the global smartphone supply chain has weakened.
As per TheElec report, the reason why the manufacturer refuses to increase the supply of Samsung Electronics AP is that although it also hopes to increase the overall supply, it cannot only increase its supply to Samsung. For this reason, Lu Taiwen left the vice president responsible for parts procurement in the United States and ordered him to return to South Korea only after the supply problem was resolved. However, he returned without success after staying in the United States for 3 months.
The report pointed out that Lu Taiwen failed to ensure more chip supply, indicating the severity of the current global chip shortage. Data shows that the supply of smartphones in the third quarter exceeded demand, which had a negative impact on smartphone production. This situation is expected to continue into the fourth quarter.
On the other hand, sources also pointed out that Lu Taiwen’s failure also shows that Samsung Mobile’s purchasing power in the global smartphone supply chain has weakened. Generally speaking, important customers usually get the first shipments, and it is extremely unusual for Samsung as the current global smartphone giant to be rejected.
They added that Samsung is increasingly dependent on Chinese original design manufacturers, which is one of the reasons for its decline, because these companies purchase parts on their own, reducing Samsung’s total parts purchases.
The shortage of chips caused Samsung to reduce its smartphone production plan. Its smartphone shipments this year are expected to be 260 million-270 million units, a decrease from the original forecast of 290-300 million units. Galaxy S series sales this year are still expected to be less than 30 million units. Although the Galaxy Z Fold 3 and Galaxy Z Flip 3 have been well received in the market, it is estimated that only 7 million units will be sold in total.