Samsung is preparing to sharply scale back smartphone production in the fourth quarter. A year-end slowdown is routine as consumers hold out for the next Galaxy S flagship, but this time the planned cut far exceeds industry expectations.

According to South Korea-based Money Today, the company's Mobile Experience division has asked suppliers to reduce shipment volumes by 20% to 30%.

Memory prices wipe out profit

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The core reason is the rapid rise in memory and semiconductor prices in recent months. Industry sources say cost increases have left Samsung earning almost nothing on the phones it sells. Rather than keep producing devices at a loss, the company is cutting volume to protect its financial balance.

TrendForce data shows the scale of the crisis starkly:

  • 12 GB LPDDR5X memory modules, widely used in smartphones, saw unit prices jump 175% year-over-year in the second quarter, reaching $145–146.
  • Prices are expected to rise another 20% quarter-over-quarter in the third quarter, hitting $180.

Since retail prices cannot rise as fast as component costs, manufacturers face severe margin pressure.

Annual target drops by millions of units

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The cut will also hit annual production totals. Samsung had originally been expected to produce roughly 270 million units this year; with the additional Q4 restrictions, that figure could fall to around 200 million.

There is no official confirmation from the company of the reported 20–30% cut. But signals from the supply chain suggest Samsung has shifted to a strategy prioritizing profitability over volume.