Memory prices have been skyrocketing for a while now, and that has been eating into smartphone makers' margins. Samsung's mobile division in particular is reportedly facing its first-ever annual loss. Today, a new report out of Korea claims the company is responding by cutting Galaxy A production in the fourth quarter of the year (October to December) by about 20% compared to its original plans.
Samsung has allegedly already passed the reduced volumes on to its supply chain. One industry source reportedly claims component orders for Q4 are down about 20% from the production plan Samsung drew up early this year, which works out to around 10 million fewer units for the full year. Another source claims the cuts won't stop there, as Samsung aims to make at least 10% fewer Galaxy A devices next year too.
Samsung Galaxy A57
This is a big deal because the Galaxy A series accounts for 70% of Samsung's smartphone shipments. It includes the likes of the Galaxy A57, Galaxy A37, and Galaxy A17 5G. Samsung ships 230-240 million smartphones per year, and it has been trading the top spot with Apple, which came out on top in 2025. Back in August, Counterpoint predicted that Samsung would beat Apple this year by a margin of just 0.1 percentage points, so making fewer of its volume sellers could easily cost it the crown.
As for why, memory now apparently makes up over half the cost of some budget phones. On top of that, materials for key components such as PCBs and MLCCs are being prioritized for AI chips, which are much more lucrative. Samsung had kept Galaxy A production steady so far, thanks to having easier access to raw materials than Chinese brands. With no end to the shortages in sight, though, it's said to be shifting parts and materials to its more profitable Galaxy S and Galaxy Z flagships.
Unfortunately, this could end up hurting buyers too. An industry insider warns that lower production may lead to higher prices, and that new phones could launch with downgraded displays or cameras while still costing more than their predecessors. That's in line with what Counterpoint warned about back in March.
Source (in Korean)