Samsung closes last factory in China, as it fails to survive among domestic rivals

Samsung closes last factory in China, as it fails to survive among domestic rivals

Samsung Electronics Co Ltd 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 2019 and suspended another factory late 2018, underscoring 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 labor costs and the economic slowdown.

Sony also said it was closing its Beijing smartphone plant and would only make smartphones in Thailand.

But 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 homegrown brands such as Huawei Technologies and Xiaomi Corp, according to market research firm Counterpoint.

Samsung, the world’s top smartphone maker, said it had taken the difficult decision in a bid to boost efficiency. It added it would however continue sales in China.

Samsung declined to specify the Huizhou plant’s capacity or its numbers of staff.

South Korean media said it employed 6,000 workers and produced 63 million units in 2017.

The company has expanded smartphone production in lower-cost countries, such as India and Vietnam, in recent years.

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