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Samsung cuts workweek from 5 days to 3 days at factory in Vietnam

The South Korean company Samsung Electronics has reduced the number of working days for manufacturing workers in Vietnam from 5 to 3 days. This enterprise is the largest, it accounts for more than 60% of the company's global production of smartphones. This may indicate the beginning of a decline in the production of smartphones.

South Korean publication ET News reports that Samsung has warned major suppliers about the transition to a three-day work week at a Vietnamese plant. The number of working days per week will vary from 3 to 4 days depending on the production line of the product.

Other companies from South Korea are also forced to reduce the number of working days at factories in Vietnam. They are reducing plans for the production of smartphone components and the frequency of operations in the second quarter of 2022. Companies lower their earnings forecasts in this time frame.

At the beginning of the year, Samsung raised the bar for total shipments to 334 million units. However, in May, the company reduced this figure to 270-280 million due to hostilities in Ukraine and the scandal with the Galaxy S22 game optimization service.

Analysts point out that Samsung's decision to shorten the working week is due to special circumstances, as the new Galaxy 4-generation foldable phone is due to go on sale in August.

Experts predict a decline in Samsung's workload in India and Brazil. The Indian facility produces 20-30% of all Samsung smartphones and is the company's second largest manufacturing base. The Brazilian plant makes 10-15% of Samsung smartphones.

Samsung, Apple and Chinese smartphone makers are being forced to cut resources due to the lingering fallout from COVID-19 and Russia's actions in Ukraine, analysts say.

A representative of the South Korean company said that the number of working days in production has always been adjusted flexibly depending on market conditions.

Last week, the Wall Street Journal reported that the semiconductor crisis will affect the largest manufacturers - Samsung and Taiwan's TSMC. According to experts, in 2024-2025 the shortage of chips will be 10-20%.

Michael Zippo
2022/06/13

https://linkedin.com/in/michael-zippo-9136441b1
[email protected]

Sources: Python.Engineering, ET News, WSJ

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