Samsung stops making phones in China

Chris Burns - Oct 3, 2019, 10:39 am CDT
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Samsung stops making phones in China

This week Samsung Electronics Co Ltd announced that they’d ended mobile telephone manufacturing in the nation of China. Cited as reasons for this move were rising labor costs and an “economic slowdown” of sorts. This marks the first time in many years that no Samsung phone factory exists inside China.

Sony recently announced that it would no longer be manufacturing smartphones in Beijing – closing a plant there earlier this year. Sony is not nearly so significant a mobile phone manufacturer as Samsung, but the shutting of plants in one market by more than one brand signifies something larger. Sony will only make smartphones in Thailand according to one Rueters report.

That same report quoted Samsung as saying “The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs.” Samsung is said to be moving away from China due to “intensifying competition” in the world’s single most massive smartphone market.

This does not mean that Samsung will stop selling smartphones – or other non-smart phones – inside China. Instead, Samsung will continue to make their phones at factories outside of China (in places like Vietnam and India) and continue to sell devices in all markets in which they already exist.

Apple continues to manufacture smartphones in China. Apple’s involvement in China with regard to the recent so-called “trade war” between the USA and China is a whole separate situation. Samsung’s situation with manufacturing in China seems to be slightly more independent of their involvement with the USA.

In China’s smartphone market it is brands like Huawei and OPPO that stand to gain from Samsung’s loss. If you’ll take a peek at smartphone shipments from early 2019 you’ll see how Huawei is effectively eating Samsung and Apple’s lunch. This was true already back in early 2018 – and it looks like Samsung’s luck hasn’t improved all that considerable an amount since then.


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