Samsung considers shutting down Chinese smartphone factory

The tech giant is allegedly deliberates closing one of its two remaining factories in China, amid slumping smartphone sales

13Aug

A South Korean newspaper has reported that Samsung has been considering shutting down its Tianjin Samsung Telecom Technology plant in northeastern China. Samsung has said it has made no definitive choice on the matter, but that the move was "under condition as a potential withdrawal".

The report comes amid Samsung's recent announcement that it will begin heavily investing in "emerging tech", as well as the revelation that it experienced its slowest quarterly profit growth in 12 months. In the space of five years, its Chinese market share has fallen from 20% to 1%, with cheaper Chinese brands such as Xiaomi and Huawei chip away at its potential customer base.


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The Tianjin Factory, which is one of its two Chinese factories, currently makes 36 million mobile phones every year and, collectively, both factories produce 108 million units every year. This figure is dwarfed by its two factories in Vietnam which collectively produce more than double that many units a year (240 million units). In recent years, the company has concentrated its focus on its factories in Vietnam and India, due to Vietnam's larger unit production and India's potential as a major export hub.

When reached for comment by Reuters, Samsung cited "slumping sales and rising labor costs" as reasons for the potential move.

"The overall smartphone market is having difficulties due to slowing growth. Samsung’ Tianjin telecom enterprise aims to focus on activities that increase competitiveness and efficiency," the company said.

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