Samsung’s smartphone part suppliers might be in big trouble

Last updated: September 5th, 2022 at 19:05 UTC+02:00

Samsung’s smartphone part suppliers are reportedly in trouble after posting one of the worst business months in over a decade. The company’s part orders to partner suppliers have diminished due to decreased smartphone sales, and for some suppliers, September is reportedly the worst month in over a decade.

Because of much lower part orders, one of Samsung’s component suppliers had to shut down its production plant for September for the first time in 15 years. Another company lowered its optical filter yield by half for the first time since the COVID outbreak. And in Q2 2022, an unnamed camera module supplier lost roughly 50% of its monthly average sales. (via ETNews)

Save for one company, all of Samsung’s camera part suppliers are in trouble

Sources say that, save for one unnamed camera module supplier, all other Samsung camera partners along the supply chain have suffered from lower production rates caused by sluggish smartphone sales and low demand.

All camera supplier have reportedly lowered their factory utilization rate in Q2 by double digits, says the new report. Furthermore, one unnamed company that used to have a production rate of 97% had to cut down to 74% this year. Another camera component factory that used to reach a 90% utilization rate fell to around 60%.

Reports say that Samsung will continue to cut orders throughout the third quarter of the year. Q3 is usually peak season for Samsung’s suppliers, but not this year. On behalf of the parts industry, an unnamed official said that Samsung is now managing its inventory as demand is lowering, but the situation could improve by the end of 2022 and part orders might pick up again.

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