Samsung Electronics is temporarily halting new procurement orders for a brief period, telling suppliers to either delay or reduce shipments of components and parts due to global inflation and swelling inventories, according to a Nikkei Asia report.
The order applies to components for multiple key product lines, including TVs, home appliances and smartphones. The postponement of orders applies to a wide range of components, including chips, electronics parts and final product packages.
According to sources, the move will last until the end of July, and the shipment to Samsung for July has not been completely halted but slashed by 50 per cent.
According to reports, the company told suppliers it has to review inventory levels of both components and final products to ensure the stock on hand is manageable. Samsung’s inventory assets touched $36.9 billion at the end of March, as per its first-quarter earnings report. The ratio of inventory assets to total assets jumped to 10.8 per cent from 9.7 per cent during the same period, a Nikkei Asia report said.