Samsung's smartphone production in May was 12 million units

Samsung produced about 12 million smartphones in May this year. That's down 20 percent from a year ago, while cumulative production for the first four months of the year is also lower than a year ago, the sources said.

The decline, if sustained throughout the year, could knock Samsung's shipment target of about 300 million units this year off the ground, the sources added. Samsung plans to manufacture about 240 million phones itself, while outsourcing the rest to contract manufacturers.

Due to the remaining inventory, the company may produce fewer phones than planned in May. The South Korean tech giant produced about 80 million phones between January and April, but some of them have yet to ship, the sources said.

Samsung is planning to increase its production to 20 million units in June, however the company also expects manufacturing to drop to 10 million units per month in the third quarter. Still, the company plans to keep production of its flagship smartphones , such as the Galaxy S series, unchanged to protect its profit margins.

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