Decimated By Local Competition, Samsung Shutters Manufacturing In China And Shifts Focus To India, Vietnam

The world’s largest smartphone maker, Samsung Electronics Co Ltd has closed down its last smartphone manufacturing facility located in China, as it continues to battle cut-throat competition from a number of homegrown Chinese players which have become increasingly popular in the country, reports Reuters.

Production at the plant in Huizhou had been suspended since June, even though it is only now that it being officially shut down. The company’s share of the Chinese smartphone market was down to just 1 per cent in Q1 of FY20, compared to the 15 per cent share it had held in mid-2013.

"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," said an analyst at Cape Investment & Securities, Park Sung-soon.

In an official statement, Samsung said that the production equipment from its shuttered plant in Huizhou will be re-allocated to sites in other countries depending on market requirements.

In recent years, Samsung has re-oriented itself to lower-cost manufacturing destinations like India and Vietnam, especially given the large and fast-growing smartphone market in the former.

In 2018, Samsung had inaugurated the world’s largest mobile phone manufacturing unit in Noida with a budget of Rs 4,915 crore.