Samsungtoday confirmed with Reutersthat it has terminated handset production in China. The company’s has been struggling with its sales because of stiff competition in the country. The company cut production at the plant in the southern city of Huizhou in June and suspended another factory a year ago. In August, the Korean Giant struggled to maintain market share even in low single digits.
Samsung has slowly phased the production in China over the past year before ultimately pulling the plug altogether. In a similar case, Sony also said it was closing its Beijing smartphone plant and will make smartphones in Thailand only. Apple is also struggling but it still makes major products in China. This is due to the rising labour costs and the economic slowdown. China’s market is dominated by homegrown companies such as Huawei, Xiaomi, Oppo and Vivo.
“In China, people buy low-priced smartphones from domestic brands and high-end phones from Apple or Huawei. Samsung has little hope there to revive its share,” says Park Sung-soon, an analyst at the Cape Investment & Securities.
Samsung has looked to other countries for its production, including India and Vietnam. Currently the world’s top smartphone makers, it said it had taken the difficult decision in a bid to boost efficiency. The company clarified it would continue its sales in China. It released an official statement stating “The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs”.
Samsung declined to release the Huizhou plant’s capacity or the staff numbers. The factory was built in 1992 and according to the South Korean media it employed 6,000 workers and produced 63 million units in 2017. The same year, Samsung manufactured 394 millions handsets around the world according to its annual report.
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