Samsung is reportedly planning to expand its assembly of smartphone camera modules. If reports are true, the move will reduce the overall unit price but may escalate the tension among suppliers.
The latest report (source: TheElec) says that the company will expand the assembly of camera modules considerably next year by taking over most of the assembly process. As of 2020, the suppliers have apparently been assembling the triple/quad-camera modules entirely for Samsung.
Mixed reactions from suppliers
However, Samsung’s new move will help save the assembling cost shelled out to the supplier and improve sales from 2021 and beyond. That said, this plan seems to have triggered varied reactions among suppliers in South Korea. For instance, companies like Namuga and CoAsia, seem to focus more on front cameras and not multi-modules at the back. Hence, they see this as a great window of opportunity as it may result in increased camera orders from Samsung.
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However, for Mcnex, this could be a big blow as it is at the risk of reduced profit. This is because the report says Mcnex has been assembling rear multi-camera modules for Samsung. Now that Samsung is planning to assemble them on its own, Mcnex could lose out on assembly orders and in-turn lose profit.
Further report adds that Samsung has been getting orders extensively from the above companies for its smartphones. The list only extends to Partron, Cammsys, Powerlogics for the upcoming Galaxy S20 FE.
What could be the motive behind this?
This move is however believed to be a strategy for increasing its overall sales. Companies like Mcnex and Powerlogics recorded 1 Trillion won in 2019 whereas Samsung’s own IT & Mobile division dropped to 9.3 Trillion won in 2019 compared to 10.2 Trillion won in 2018.
Samsung continues to diversify the camera module suppliers and look for alternative options to keep the price competitive. This corroborates with its own Electro-Mechanics division’s plans to enter the mid-range camera market a while ago.
That said, experts feel that Samsung may also run into issues like assembly defects, third-parties sending sub-par goods. Nevertheless, we will have to wait and see how this pans out in the future.
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