UPDATED. 2024-04-11 10:05 (목)
Samsung Mobile cuts Q3 component prices
Samsung Mobile cuts Q3 component prices
  • Gijong Lee
  • 승인 2020.10.15 19:50
  • 댓글 0
이 기사를 공유합니다

Samsung Display cuts unit prices of suppliers as well
Image: Samsung
Image: Samsung

Samsung Electronics’ strong third quarter performance looks like it was in part from the conglomerate cutting unit prices of suppliers.

Samsung Mobile and Samsung Display significantly reduced unit prices from suppliers in the third quarter compared to the same time period last year, people with direct knowledge of the matter told TheElec.

Samsung Mobile cut the prices by 8% to 9% __ Samsung Display forced a double digit cut to suppliers.

Samsung has cost reduction negotiations with suppliers once every quarter. The usual rate of reduction is 3% to 5% per quarter. But the price cut in the third quarter of 2020 was unusually high, the people said.

The South Korean tech giant made the decision for the big reduction in May. In the second quarter, Samsung and its suppliers saw factory operation rate nosedive due to the poor sales of the Galaxy S20 series.

Some of the suppliers, to increase factory operation rate and sales, won orders from Samsung by offering their components cheaply. This trend expanded to all components which further exasperated unit prices in the third quarter.

Thanks to this cost  reduction, Samsung is aiming to ship up to 170 million smartphones in the second half of 2020. The company moved 90 million smartphones in the first half of 2020. 

The cut prices of the third quarter will continue to the fourth quarter for suppliers as components that has gone into production usually never see price increase. 

Suppliers to Samsung will likely see operating margin rates of 1% to 2% in the third quarter.

However, they may see margin rates recover in the fourth quarter thanks to the Galaxy S21 smartphone series going into production. Samsung puts quality first when it comes to the Galaxy S series and is willing to pay more generously for components used for them.

Meanwhile, Samsung Mobile is likely to have contributed to the conglomerate’s 12.3 trillion operating profit in the third quarter, which beat market expectations. Samsung Mobile likely contributed around 4.7 trillion won in operating profit. 

삭제한 댓글은 다시 복구할 수 없습니다.
그래도 삭제하시겠습니까?
댓글 0
계정을 선택하시면 로그인·계정인증을 통해
댓글을 남기실 수 있습니다.

  • 515, Nonhyeon-ro, Gangnam-gu, Seoul, Republic of Korea 4F, Ahsung Bldg.
  • 대표전화 : 82-2-2658-4707
  • 팩스 : 82-2-2659-4707
  • 청소년보호책임자 : Stan LEE
  • 법인명 : The Elec Inc.
  • 제호 : THE ELEC, Korea Electronics Industry Media
  • 등록번호 : 서울, 아05435
  • 등록일 : 2018-10-15
  • 발행일 : 2018-10-15
  • 발행인 : JY HAN
  • 편집인 : JY HAN
  • THE ELEC, Korea Electronics Industry Media Prohibiting unauthorized duplication,publishing,modification and distribution the material on this Site for any purpose.
  • Copyright © 2024 THE ELEC, Korea Electronics Industry Media. All rights reserved. mail to powerusr@thelec.kr