Samsung, the world’s largest smartphone manufacturer, is facing the lowest operation rate ever in its entire history. Despite being one of the largest consumer grade electronics maker and a major multinational brand, the effects of the Coronavirus pandemic has severely crippled its operations.
According to reports, the South- Korean tech giant has halved its smartphone manufacturing. The company even had to temporarily shut down various factories and offline stores across the globe, due to the various government enforcing local lockdowns. For those unaware, a new strand of Coronavirus has caused a global pandemic, leading governments to shut down various factories and production lines. This has affected various fields including the smartphone industry.
ETNews have reported that Samsung might be facing an all time low of its operation rates in the Q2 of 2020. Furthermore, the closed factories will also lead to increased fixed costs, lower production output, lower sales, and dropped revenues. As it stands right now, raising the production will only make inventories pile up, as the company already has stocks remaining from previous months.
At the moment, it seems like the global economy is heading for a recession, which in turn makes people less likely to spend on things that are considered non-essential. Samsung has already closed down its smartphone and home appliances factories in nations like India, Brazil, Mexico, Russia, Slovakia, Vietnam, and even the US. Additionally, it is expected that the closure and lockdowns will extend by another month at the very least.
On the other side, Samsung is also helping wherever it can to combat the COVID-19 virus. The firm has donated about $24.6 million already to its home country, South Korea and $5 million in India. It also offered special schemes that allow disinfecting of smartphone screens for free. So, despite best efforts, the effects of the Coronavirus pandemic are all but devastating right now.