Galaxy S22 Sold Out... Samsung Also Worried About 'Semiconductor Supply'

Self-Contract Phone Sold Out on First Reservation Day
Up to 4 Times Increase Compared to Before Pre-Notification Application

Semiconductor Shortage Worsens Due to Ukraine Crisis
Possible Supply Delays for Some Models

[Asia Economy Reporter Cha Min-young] The Galaxy S22's unlocked version sold out on the first day of pre-orders. The three major telecom companies also revealed that the number of pre-orders is 2 to 4 times higher compared to the Galaxy S21, and it is expected to significantly surpass the 200,000 pre-orders recorded by the S21 in one week.

S22 ‘Unlocked Phones Sold Out’… Early Sensation

On the 15th, most of the unlocked Galaxy S22 pre-orders were sold out on Samsung Electronics' official website as well as on Coupang, SSG.com, and Wemakeprice. 11st conducted a live broadcast for two hours, generating sales of 13.2 billion KRW. The unlocked models are seeing high early pre-order demand mainly from the MZ generation who want to use MVNO (Mobile Virtual Network Operator) plans. The three telecom companies also reported that the number of pre-order notification requests increased up to four times compared to the S21. A telecom industry official said, "Among the three models, the Galaxy S22 Ultra is the most popular, accounting for 60-70% of orders."

Although the ambitious S22 has succeeded in early sales, Samsung Electronics faces a complicated situation. Factory operating rates have decreased since the COVID-19 pandemic, and the semiconductor supply shortage continues. In particular, concerns have been raised that the semiconductor supply shortage may worsen due to expected price increases in semiconductor raw materials caused by the Ukraine crisis.

At the end of last year, Samsung Electronics shifted part of the smartphone production lines from its partners in Vietnam to its domestic Gumi factory to prepare for supply disruptions, but it could not avoid delays in shipping some models due to the impact of COVID-19 and semiconductor supply shortages. Earlier, Apple also experienced about a four-week delay in deliveries despite the strong sales of the iPhone 13 last September.

The electronics industry expects that the semiconductor supply issue will likely delay the initial supply of the S22 series. Due to unstable semiconductor supply, the entire S22 series could be delayed by at least one week and up to nearly a month. A semiconductor industry official said, "Smartphones use many semiconductors besides the application processor (AP), such as power semiconductors, display driver chips, and image sensors. If even one of these components faces supply instability, delays in supply are inevitable."

Russia Crisis Intensifies Semiconductor Risks

On the 10th, the 'Galaxy S22' was exhibited at the Samsung Electronics Delight Shop in Seocho-gu, Seoul. On this day, Samsung Electronics held an Unpacked event and unveiled the new product, the 'Galaxy S22 series.' It is sold in three models: the standard Galaxy S22, the large-screen mid-range Galaxy S22+, and the phablet premium Galaxy S22 Ultra equipped with an S Pen. / Photo by Mun Ho-nam munonam@

The semiconductor industry expects that if tensions between the U.S. and Russia continue, global semiconductor supply risks will be prolonged. Neon and palladium, which are highly dependent on Ukraine in the semiconductor chip manufacturing process?a core component of smartphones?are essential materials. According to the Korea International Trade Association, Ukraine accounted for 23% of neon imports to Korea last year, ranking second after China. In 2020, Ukraine's import share was 66.6%, ranking first. Although Russia's import share is not high, global price increases are anticipated, which is expected to raise cost burdens.

The telecommunications equipment industry is also increasingly concerned as semiconductor chips are essential. A chief technology officer (CTO) from an equipment company said, "Since last year, due to geopolitical issues, the telecommunications industry as a whole has faced difficulties in procuring some parts. While it is uncertain whether this is directly related to the Ukraine crisis, there are definitely challenges."

The Ministry of Science and ICT, the relevant government department, is also monitoring the situation. A ministry official said, "We have not yet received any requests related to difficulties from exporting companies, but we are closely monitoring the situation in cooperation with related agencies such as the Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs."

Professor Shin Min-soo of Hanyang University's Department of Business Administration stated, "In recent years, due to negative perceptions related to overseas resource development projects, dependence on foreign countries for resources has increased. We expect that supply risks surrounding semiconductors, which are at the core of the U.S.-Russia technological hegemony competition, will be prolonged. It is important for our government to effectively play the role of mediator regarding the supply instability faced by companies."

This content was produced with the assistance of AI translation services.