What you need to know
- Samsung has closed its last remaining smartphone factory in China.
- The closure comes in response to stiff homegrown competition, rising labor costs, and the economic slowdown.
- Production will be shifted to India and Vietnam.
Samsung has been losing ground in China for years now as homegrown brands, such as Huawei and Xiaomi, continue to rise. In what is another sign that China is a lost market for Samsung, the company has just officially shut down its last phone factory in the country.
Park Sung-soon, an analyst from Cape Investment & Securities, had this to say:
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.
The news comes after Samsung initially reduced production at the factory in Huizhou last June and suspended another factory last year. A decrease in demand for Samsung phones is not the only reason Samsung has decided to close its last smartphone factory in China.
It also cites increasing labor costs and the economic slowdown. At the same time, smartphone sales have been on a downward trend globally for years now and that certainly played a factor as well. With its last phone factory in China closing, production has now shifted to more affordable countries such as India and Vietnam.
Samsung isn't the only one getting out of China though. Sony has also stated it will be closing its Beijing smartphone plant and using factories in Thailand instead. We also reported back in August that Google was moving its production of the Pixel smartphones outside of China to Vietnam citing the rising labor costs and tariffs as the reason.
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