Hurt by the tough competition from domestic rivals in the world’s biggest smartphone market, the Samsung Electronics Co Ltd has stopped mobile telephone production in China.
The South Korea-based company confirmed on Wednesday the decision to shut down its last remaining plant in the southern city of Huizhou in China.
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In the recent years, Samsung, one of the popular mobile phone brands in India, has been continuously shifting its smartphone production in the lowest-cost countries like India and Vietnam.
According to media reports, the shutdown of the last production factory of Samsung in China came after it cut down production at the plant in the southern city of Huizhou in June last.
Underscoring the stiff competition in China, Samsung also suspended its production in another factory last year.
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The South Korea based tech giant’s decision to cease phone production in China follows other manufacturers expanding their production from China to other countries due to economic slowdown and rising labour costs.
It has been reported that another mobile phone manufacturer Sony also said it was closing its Beijing smartphone plant and decided to make smartphones only in Thailand.
However, Apple Inc., an American multinational technology company headquartered in Cupertino of California, still continues to make major products in China.
A Business Standard report quoted Park Sung-soon, an analyst at Cape Investment & Securities, as saying: “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.”
According to the market research firm Counterpoint, the share of Samsung in the Chinese market came down to 1 per cent in the first quarter from around 15 per cent in mid-2013 as it lost out to fast-growing homegrown brands such as Huawei Technologies and Xiaomi Corp,
Samsung in its statement said: “The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs.”
It may be mentioned that Samsung’s Huizhou factory was built in 1992 and the company had 6,000 workers and produced 63 million units in 2017.
As per the annual report of the company, this year Samsung manufactured only 394 million handsets around the world.