Samsung Galaxy A phones are reportedly to be produced by a fifth less than planned by the end of the year. They may also become more expensive.

Expensive memory chips have already forced many manufacturers to raise prices this year, but now they are also affecting the production volume of cheaper mobile phones. According to the Korean daily ETNews, Samsung will reduce the production of cheaper Galaxy A phones by approximately 20% between October and December compared to the plan from the beginning of the year. The freed-up components are to be moved to more expensive models, which are more profitable.

10 Million Fewer Phones by Year-End

As ETNews writes, the manufacturer has already communicated the new volumes to suppliers. According to an unnamed industry source, component orders for the fourth quarter are a fifth lower than the company had planned, which represents a decrease of approximately 10 million units for the entire year. The situation is reportedly worsened by the fact that the company’s mobile division is operating at a loss this year. Another source claims that in 2027, Samsung intends to further reduce Galaxy A production by more than 10%.

This is a significant blow for Samsung. The cheaper series accounts for about 70% of all its shipped phones and includes models like Galaxy A57, A37, or A17 5G. The company ships 230 to 240 million smartphones annually and competes with Apple for the top spot globally. Counterpoint analysts predicted in August that Samsung would finish ahead of Apple this year by just a tenth of a percentage point. According to ETNews, smaller Galaxy A production could thus cost the company its lead.

Memory Chips Account for Over Half of Component Costs in Some Phones

The cuts are mainly due to rising chip prices. According to ETNews, in some mid-range phones, memory chips sometimes accounted for over half of the component costs. Furthermore, manufacturers of AI chips are given priority access to materials for printed circuit boards and ceramic capacitors.

Samsung had previously maintained production of cheaper models because it has easier access to raw materials than its Chinese competitors. However, the shortage is not ending, so it will reportedly shift components to its flagship Galaxy S series and foldable Galaxy Z phones.

New Models May Become More Expensive and Have Reduced Features

Customers may also bear the brunt. One ETNews source warns that reduced production could drive up the prices of these phones. According to another, new models might come with a worse display or camera, yet still cost more than their predecessors.

Would you opt for a more expensive Galaxy A with worse features, or would you prefer last year’s model?

Sources: ETNews, 9to5Google, GSMArena