Samsung Electronics has reportedly asked suppliers to reduce smartphone production by 20% to 30% in the fourth quarter of 2026. The request comes as memory-chip costs rise. Demand for advanced memory chips from AI data centers is tightening supply and driving up prices for memory used in smartphones.
Global smartphone shipments fell 11% year over year in the second quarter of 2026. That was the lowest second-quarter level since 2013.
Samsung’s semiconductor business is benefiting from strong AI-sector demand, while its mobile division faces higher component costs. The production adjustment could shift focus toward more profitable models rather than total shipment volume.