Samsung Electronics is reportedly facing issues shipping enough TVs and is stuck with an oversupply of LCD panels. Because of this, Samsung has reportedly suspended the purchase of LCD panels from its suppliers until further notice.
Market watchers expected Samsung to procure around 54 million LCD panels for its smart TV division this year. However, due to lower-than-forecast TV shipments, Samsung cut its annual target to ~40 million TVs during the H2 strategic meeting. Analysts now estimate that Samsung will acquire 44 million LCD panels throughout 2022.
One reason why Samsung is temporarily halting LCD orders is that TV demand plummeted in the first half of 2022, especially in Europe and North America. However, this isn't the only reason.
The company overstocked on purpose last year
Samsung reportedly ordered 10% more TV panels in 2021 compared to the year before as a way to create a safety buffer and solve its logistics problems amid the global shortage. But now, industry officials (via The Elec) estimate that Samsung has enough inventory for at least 16 weeks worth of TV manufacturing, transportation, warehousing, and distribution.
In other words, considering lower-than-expected TV sales in H1 2022 and Samsung's increased panel orders in 2021, the Korean tech giant had to temporarily halt LCD panel orders from suppliers: BOE, China Star, HKC, AUO, and Innolux. Samsung will stop taking in new LCD panel orders until the end of July at the earliest.
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