Samsung has closed its last smartphone production unit in China, hurt by intensifying competition from Chinese brands like Huawei, OPPO, Xiaomi. Recently, the company has expanded smartphone production in lower-cost countries, such as India and Vietnam.
Samsung has ended mobile telephone production in China, it said on Wednesday (October 2), hurt by intensifying competition from domestic rivals in the world’s biggest smartphone market.
The shutdown of Samsung’s last China phone factory comes after it cut production at the plant in the southern city of Huizhou in June.
The company has suspended another factory late last year, due to stiff competition in the country.
The South Korean tech giant’s ceased phone production in China follows other manufacturers shifting production from China due to rising labour costs and the economic slowdown.
Sony also said it was closing its Beijing smartphone plant and would only make smartphones in Thailand.
On the other hand, Apple still makes major products in China.
Samsung’s share of the Chinese market shrank to 1% in the first quarter from around 15% in mid-2013, as it lost out to fast-growing Chinese brands such as Huawei Technologies and Xiaomi Corp.
Park Sung-soon, an analyst at Cape Investment & Securities said that, In China, people buy low-cost smartphones from Chinese brands and high-end phones from Apple or Huawei. Samsung has little hope there to revive its share.
Samsung, the world’s top smartphone maker, said it had taken the difficult decision in a bid to boost efficiency. The company added it would however continue sales in China
The company said in a statement that, the production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs.
South Korean tech giant #Samsung has closed its last #mobile phone factory in #China after losing market share in the country amid fierce competition from domestic rivals: report pic.twitter.com/fOykSl2j4C— People's Daily, China (@PDChina) October 3, 2019
Samsung declined to specify the Huizhou plant’s capacity or its numbers of staff, the factory was built in 1992.
That year, Samsung manufactured 394 million handsets around the world, as per its annual report.
Samsung has expanded smartphone production in lower-cost countries, such as India and Vietnam, in recent years.