Lack of chips, Samsung's 'boss' went to the US to ask for more but was refused

The president of Samsung's mobile division, TM Roh, himself had to go to the US to meet a large corporation to buy more chips, but his efforts were unsuccessful.

Lack of chips, Samsung's 'boss' went to the US to ask for more but was refused
Lack of chips, Samsung's 'boss' went to the US to ask for more but was refused

The global chip shortage is affecting many smartphone brands. For example, Google has to limit the sale of Pixel 5a to only a few countries, Realme pushes the launch of Realme 9 to 2022, or Samsung is rumored to cancel the launch of the Galaxy S21 FE model.

According to a report from Korean newspaper TheElec, this problem at Samsung has become so bad that the company's mobile division president, TM Roh, has had to twice personally visit the US to ask a manufacturer. "anonymous" chips provide additional chips. Although not disclosed, but most likely that chip manufacturer is Qualcomm. Currently, Samsung is using Qualcomm chips on many smartphone and tablet lines, including high-end models such as Galaxy Z Fold3, Galaxy Z Flip3, Galaxy S21 or Galaxy Tab S7.

TheElec's source said Mr. TM Roh has visited the US twice this year for the above purpose, the first time in March and the second time in July. However, on both occasions, Mr. TM Roh's request were immediately rejected. The American chipmaker told the Samsung chairman that it was keen to increase chip production, but could not prioritize Samsung.

TM Roh - Samsung's head of mobile.
TM Roh - Samsung's head of mobile.

This response from the aforementioned chip maker is considered very unusual considering the position of Samsung, which is also the world's No. 1 smartphone company. Experts point out that Samsung's increasing reliance on ODMs (Original Design Manufacturer) is one of the reasons why its component purchasing power has decreased, which in general affects its position. position of the "Korean giant" in the eyes of component partners.

According to statistics, since Mr. TM Roh approved Samsung's cooperation with ODMs in 2018, the percentage of Samsung-branded smartphones manufactured by ODMs has now reached 20%. Some models such as Galaxy A6S, Galaxy A01 or Galaxy M02 are taken care of by Samsung's partners from China such as Wingtech or Huaqin. These ODMs all have their own component supply contracts, so there is no need to depend on Samsung's supply.

During his second visit to the US in July, Mr. TM Roh was accompanied by a vice president in charge of importing components. The vice president was ordered to return to Korea only when the situation was resolved. It took three months before he returned home. Previously, this person was severely warned by Samsung's chairman himself for allowing this situation to happen.

Currently, the chip shortage is affecting Samsung's plans. Samsung is considering stopping the release of the Galaxy S21 FE model due to insufficient supply of the Snapdragon 888 chip, and it wants to save this chip for two more important models, the Galaxy Z Fold3 and Galaxy Z Flip3. Previous evidence suggests that the Galaxy S21 FE has reached the finishing stage and is just waiting for production, but with this situation, it will most likely be "dead" at the last minute.

The leaked promotional image of the Galaxy S21 FE shows that Samsung is ready to launch this device on the market, but it will most likely be cancelled.
The leaked promotional image of the Galaxy S21 FE shows that Samsung is ready to launch this device on the market, but it will most likely be cancelled.

In addition to the interruption of Samsung's smartphone factory in Vietnam due to the COVID-19 epidemic, it is expected that Samsung will ship 260-270 million smartphones in 2021, lower than the initial expectation of 290-300. million machines.

Google Tech News

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