Under fire Samsung 'suspends' Galaxy Note 7 production

Note 7 maker says it's adjusting the production schedule to ensure quality and safety matters.

Samsung Galaxy Note 7
Samsung Galaxy Note 7 concept image galaxynote7info

Samsung Electronics has suspended the production of Galaxy Note 7 smartphone, South Korea's Yonhap news agency said citing sources.

The smartphone company which gave iPhone maker Apple a run for its money, has been hit hard by several instances of its flagship device catching fire.

The company's decision to halt Galaxy note 7 production is part of compliance measures after consumer safety regulators from South Korea, the United States and China got into action, the agency said citing an official at a Samsung supplier.

"This measure includes a Samsung plant in Vietnam that is responsible for global shipments (of the Galaxy Note 7)," the source said.

Meanwhile, BBC quoted Samsung officials as saying the company was "adjusting the production schedule to ensure quality and safety matters".

Samsung started a massive recall programme in September after instances of the device catching fire, sometimes aboard passenger planes, were reported from around the world.

Around 2.5 million units have been reportedly recalled so far. Samsung assured last month the fixed phones were safe to use, but reports of the devices emitting smoke continued to be reported.

This led to US mobile networks stopping the sale and replacement of the phone.

"While Samsung investigates multiple reports of issues, T-Mobile is temporarily suspending all sales of the new Note 7 and exchanges for replacement Note 7 devices," T-Mobile announced.

Samsung admitted in an official statement in September that the overheating of the device was the result of a "rare" manufacturing error involving the battery.

"We continue to move quickly to investigate the reported case to determine the cause and will share findings as soon as possible," a Samsung statement read.

"If we conclude a product safety issue exists, we will work with the CPSC (US Consumer Product Safety Commission) to take immediate steps to address the situation."

On Friday, Samsung shrugged off the impact from the Galaxy Note 7 recall, saying it estimated third-quarter profit rose 5.6 percent, beating analysts' estimates.

It said operating profit for the July-September quarter was 7.8 trillion won (US$7 billion). The rise in profits was boosted by strong growth in chip and display earnings.

Ironically, analysts estimate that Samsung's problems with the Note 7 could indirectly boost its chips business, which actually buoyed the company's third quarter results.

Samsung's semiconductor segment is the world's top memory chip maker. The massive recall has meant there is a spike in the demand for the chips, driving up the prices in turn.