Samsung ends mobile phone production in China
03 Oct 2019
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Samsung Electronics Co Ltd has ended mobile telephone production in China as its share of the Chinese market shrank to 1 per cent in the first quarter from around 15 per cent in mid-2013, amidst intense competition from local brands such as Huawei and Xiaomi.
Samsung announced the closure of its last China phone facility on Wednesday after it cut production at the plant in Huizhou in June and suspended another factory late last year.
Samsung, the world's top smartphone maker, said it had taken the difficult decision in a bid to boost efficiency, adding that it would, however, continue sales in China.
The South Korean tech giant’s decision to shift phone production out of China may also be attributed to rising labour costs and the slowdown of the Chinese economy.
The company has expanded smartphone production in lower-cost countries, such as India and Vietnam, in recent years.
"The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs," it said in a statement, without elaborating.
While Samsung did not specify the Huizhou plant's capacity or the number of its workforce, South Korean media reports said the factory produced 63 million units in 2017 and employed 6,000 workers.
Samsung manufactured 394 million handsets around the world in 2017, according to its annual report.
Japanese electronics giant Sony also said it was closing its Beijing smartphone plant and limit smartphone production outside Japan to Thailand.
However, US technology bellwether Apple continues to make major products in China.
