According to a new report, Samsung has started scaling back smartphone output, and the reason is… financial, of course. Selling phones is not exactly paying off, and the company felt the need to react.
Samsung is cutting Galaxy phone production considerably due to high component costs
Based on a report by Money Today, the company will decrease smartphone output for the last three months of the year by as much as 30%. Samsung allegedly told its suppliers to ship 20% to 30% fewer components.
If that’s true, that’s a completely different situation than IDC predicted. IDC predicted Samsung would decrease production to around 52 million in Q4 2026, from 59 million in the third quarter. However, that difference will be more notable. It won’t be 12%, as IDC predicted.
While the decrease is not surprising, the sheer scale of it is. Q4 is not exactly Samsung’s busiest quarter. The company’s Galaxy S flagships arrived in Q1, while the Galaxy Z flagships drop in Q3.
Granted, Q4 is usually not Samsung’s most profitable period
So even though it’s holiday season, many buyers do wait for the Galaxy S models that arrive in January or February. That’s not all that surprising. However, the reasons for this huge decrease lie elsewhere.
Samsung released its earnings guidance for Q3 2026, which we already wrote about. In it, it was mentioned that while Samsung will have another extremely profitable quarter, its mobile business is suffering. It’s actually operating at a loss because of component prices.
According to TrendForce, 12GB of LPDDR5X memory sold for $145 to $146 in the second quarter is nearly triple what it cost a year before that. AI is the reason why, as AI companies are taking basically every memory chip they can get their hands on.
Coincidentally, that demand for RAM also benefited Samsung as a whole, as the company managed to earn a lot of cash by selling it.
The post High Component Costs Force Samsung to Panic-Cut Galaxy Phone Output appeared first on Android Headlines.
​Â
