The smartphone wing of South Korean giant Samsung has run aground with stock problems. In fact, the tech juggernaut currently has a stock inventory of 50 million units across all its distributors waiting to be sold. There are a few factors leading up to the stuck inventory of which, low demand is tagged as a primary one.
Samsung is facing stuck inventory due to low demand
Samsung has run aground with over 50 million units stuck in its inventory. As a South Korean publication has learned, the Samsung Galaxy A series comprising of mid-range models makes up for a majority of inventory that is currently waiting to be sold.
Samsung had aimed the ship around 270 million units this year where 50 million is equivalent to 18% of the total expected shipment. Here, 10% or below 10% is the healthy stock available at Samsung. According to the publication, low demand for Samsung units is a major reason behind the stockpile. Along with it, Russia’s invasion of Ukraine, Covid lockdown in China, and increased raw material are the reasons behind stock piling up as well apart from the low demand.
The South Korean giant manufactured 20 million units a month between January and February this year followed by 10 million units in May. It had originally planned a whopping 334 million units as its annual production target for 2022 but dipped it to around 270 million units after adjusting to the annual estimations. Samsung has also cut back its component orders by 30% to 70% from April to May as well thereby emphasizing the low demand that ensues.
