Tech giant Samsung Electronics Co. announced last Oct. 4 that they arrived at a decision to shut down its last smartphone factory in China. The factory, which started in 1992 and is located in the southern city of Huizhou has ceased its production as early as last month. Samsung didn’t disclose the plant’s capacity nor its total number of workers.
In a written statement, Samsung Electronics said they had to make the hard call out of the necessity to further enhance their efficiency in production and manufacturing.
Prior to this announcement, it was reported that the South Korean company has already diverted a large portion of its smartphone production to Vietnam last year. This is following the closing down of yet another factory in Tianjin, the northeastern part of China, within the same period.
Meanwhile, China-based brands like Huawei and Xiaomi reportedly have a huge advantage with the smartphone market in the country. On the other hand, Samsung’s market share in China has significantly decreased as competitors took a great lead.
An analyst from South Korea said that Chinese buy low-end units from the local brands and in contrast, purchase high-end units either from Huawei or Apple. In the last few years, Samsung has struggled to find its place in the China smartphone market.
The China market share is a significant factor in the decision of Samsung. The company also said that their manufacturing equipment shall be re-assigned to other sites depending on the market demand as well as their location-based strategy in production.
Samsung’s move, however, has no effect on its dealership as it will continue to sell smartphones brand in China. Other than smartphones, Samsung is the world’s biggest manufacturer of semiconductors as well as LCD displays.
In recent years, Samsung outsourced smartphone production in countries where labor and other cost is lower, such as Vietnam and India.
