Samsung Prepares to Produce 10 Million Fewer Galaxy A Phones Annually

    Samsung is preparing to reduce production of Galaxy A smartphones due to rising memory and chip prices. The plan covers October through December of this year. The company may produce about 20% fewer phones than it had previously planned. As a result, annual output will fall by about 10 million units. Samsung’s mobile division is also said to be on track to end the year with a loss for the first time in its history.    The company has already informed component suppliers about the reduced production volume. Orders for the final quarter are about 20% lower than planned at the beginning of the year. On an annual basis, production is expected to be about 10 million smartphones lower. The decline is said to be set to continue in 2027, with Galaxy A output to be reduced by at least 10%.    The Galaxy A series accounts for 70% of total shipments and represents a major share of Samsung’s sales. This family includes the Galaxy A57, Galaxy A37 and Galaxy A17 5G. The company ships between 230 million and 240 million smartphones each year. Apple was the market leader last year. According to an August forecast, Samsung was expected to move ahead this year by just 0.1 percentage points.    Memory components account for more than half of the production cost of some budget smartphones. In the midrange category, memory and the main chip together account for about half of the total cost. Printed circuit boards (PCBs) and multilayer ceramic capacitors (MLCCs), which are essential for phones to operate, are being allocated to more profitable artificial intelligence (AI) chips. Samsung has so far been able to keep Galaxy A production stable because it has easier access to raw materials from Chinese manufacturers. However, the component shortage is not expected to end anytime soon.    Under these circumstances, Samsung wants to direct components and materials toward the more profitable Galaxy S and Galaxy Z flagships. The company’s best-selling phones were usually from the Galaxy A family, but this year the Galaxy S26 series has moved ahead in sales. The production cut could make budget and midrange models more expensive. New phones could even go on sale with inferior displays or cameras while costing more than their predecessors.