Samsung Electronics is said to be promoting “component standardization” for smartphones. This is a plan to overcome the instability of the global parts supply chain caused by the epidemic and improve production flexibility. Supply chain management such as quantity control for partners is expected to change dramatically as parts are standardized.
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According to the latest report, Samsung Electronics has instructed smartphone partners to develop common parts with high compatibility. So far, Samsung Electronics has been separating components for high-end smartphones and mid-to-low-end phones.
Because every smartphone has different parts, there are dozens of camera modules. Aside from the core components that differentiate high-end and mid-range smartphones, most of the compatibility protection methods are shared.
Moreover, the impact of the epidemic is decisive. Last year, Samsung Electronics’ smartphone production suffered a major setback due to complex headwinds such as a shortage of semiconductors and power shortages.
New strategic smartphones were also not available on time. Improved component compatibility is suggested as an alternative. This way, even if there is an unexpected supply problem at one link in the supply chain, stable plant operation is still possible if there is a system in place to quickly obtain replacement parts.
Furthermore, production costs can also be reduced accordingly. As the variety of parts is reduced, supply chain management becomes simpler, which can improve the cost structure. The ultimate goal is to “standardize parts”. Its purpose is to reduce inventory risk by producing new components when new products are launched, thereby increasing production competitiveness.
The parts industry is closely watching Samsung Electronics’ strategic changes. Because the competitiveness of the cooperative enterprise’s mass production will inevitably attract attention. If several component manufacturers are producing compatible and similar components at the same time, they can choose a supplier based on volume and production cost. Price-cutting competition among component manufacturers is bound to intensify.
A person in the parts industry predicts: “If the structure of the cooperative enterprise is adjusted according to the output and unit price competitiveness, it is also possible to change the supplier.”
