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Samsung Electronics considers skipping Galaxy Note this year

South Korean tech giant also says chip shortage affecting smartphone production

Samsung Electronics said it may skip upgrading its Galaxy Note handset line this year and acknowledged serious chip supply issues affecting its smartphone production.   © Reuters

SEOUL -- Samsung Electronics said Wednesday it may forgo upgrading its Galaxy Note handset line in 2021 and acknowledged serious chip supply issues as a worsening shortage of the critical components plays havoc with global supply chains for products from smartphones to vehicles.

Koh Dong-jin, one of Samsung's three CEOs and who is in charge of its mobile division,made the comments at the company's annual general shareholders meeting in the city of Suwon, south of Seoul. The Note is a key product for the world's largest smartphone maker. It is characterized by a large screen and comes with a stylus, known as the S Pen.

"We applied the S Pen experience to the Galaxy S21 Ultra, launched this year," Koh told the meeting. "It can be burdensome to launch two S Pen models in a year," he added, suggesting that could make it "difficult to launch [a new Galaxy Note] in the second half."

Koh also said, however, that the company will offer a new Note next year, denying market rumors that Samsung will kill the model. 

His comments come as Samsung's foldable smartphones are gaining popularity with consumers thanks to their unique design and features, including wide screens and the ability to take high-resolution photos with three cameras.

Koh said Samsung is struggling to maintain chip supplies for its handsets and is sending its executives on frequent overseas business trips to meet suppliers. Samsung produces memory chips for its smartphones but also buys different chips from suppliers in China and other countries.

"All of us are making efforts every morning to resolve this issue," he said. "The second quarter seems to be problematic, but we will make sure not to cause any problems."

The meeting came as company Vice Chairman Lee Jae-yong is serving a two-and-half-year prison term after being convicted of bribery and embezzlement. Lee has been in prison since January.

Some shareholders demanded that the board dismiss Lee, the scion of the Samsung corporate dynasty founded by his grandfather.

But Kim Ki-nam, another CEO, deflected those calls.

"The company will review the matter comprehensively after considering Vice Chairman Lee Jae-yong's roles in global networks and future business as well as the company's situation and legal regulations," Kim said.

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