Samsung Work Reductions
According to local South Korean press, Samsung Electronics has notified major suppliers that workers at its Vietnam smartphone assembly plant will be reducing the number of days they work each week, with some lines as low as 3 days/week. While unusual in anticipation of the August release of the Galaxy Fold/Flip lines, it is in keeping with the target reductions we have seen from Samsung itself and a number of its customers. Samsung’s Vietnam assembly plant would be responsible for ~55% of Samsung’s smartphone volume this year, which would amount to ~154m units (280m total target) or 12.8m/month. We know that a substantial portion of the Samsung Galaxy foldable line was assembled in Vietnam last year, with smaller amounts assembled in Brazil and South Korea, so with 6 months to produce, assemble, and ship ~10m foldable (series 4) units expected to be shipped this year we would expect that the Vietnam plant is scheduled to assemble ~8m units, with the remainder assembled in Brazil and South Korea.
With maximum production in July for August shipment, the 2m Galaxy Folds we would expect for the month could be theoretically produced in 4.67 days utilizing the entire Vietnam plant, so utilizing 25% of the plant’s resources, a more realistic view, would take a bit over 18 days, which could be accomplished even if those lines were running 4 days/ week for half of the month, and likely the Galaxy Fold assembly lines would be the ones still running 5 days/week. More likely would be reductions to 3 or 4 day/week on lines for outside customers, where the release of new product was not imminent, so we see the reductions as in line with the overall weakness in the smartphone market.
With maximum production in July for August shipment, the 2m Galaxy Folds we would expect for the month could be theoretically produced in 4.67 days utilizing the entire Vietnam plant, so utilizing 25% of the plant’s resources, a more realistic view, would take a bit over 18 days, which could be accomplished even if those lines were running 4 days/ week for half of the month, and likely the Galaxy Fold assembly lines would be the ones still running 5 days/week. More likely would be reductions to 3 or 4 day/week on lines for outside customers, where the release of new product was not imminent, so we see the reductions as in line with the overall weakness in the smartphone market.
Samsung Electronics – Smartphone Assembly Share By Region - 2021 - Source: SCMR LLC, etNews, Company Data
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