According to THE ELEC report, due to the sharp decline in Samsung ’s smartphone production, its Korean parts suppliers expect poor earnings in the second quarter.
According to sources within Samsung, Samsung reduced its smartphone production in April to 10 million units, a significant decrease from the usual 25 million units a month. A person with direct knowledge disclosed that this is a "life or death" situation for some companies.
One of the people familiar with the matter said that due to Samsung ’s sales plan for the first half of 2020, the company ’s revenue in the first quarter was pretty good, but orders would be “turned down sharply” in the second quarter.
Another person familiar with the matter said that Samsung Electronics ’orders to Chinese ODM manufacturers this year have doubled from the previous year. At the same time, due to the contraction of the smartphone market due to the COVID-19 epidemic, South Korean PCB manufacturers' sales in the second quarter are expected to decline by 30%.
In addition, another person familiar with the situation pointed out that Samsung is also self-assembling the camera module of its smartphone, and this work was previously done by a subcontractor.
People familiar with the matter also said that most companies have lost orders to assemble three- or four-camera cameras for Samsung, which has led to a decline in their sales and profits.
Similarly, most lens manufacturers failed to make a profit in the first quarter and expected to lose again in the second quarter. However, it is reported that Samsung internally expects that the demand for smartphones will surge in the third quarter, and in the fourth quarter, due to the possible comeback of COVID-19, demand will decline again.