Samsung has decided to shut down its smartphone production line in China, this decision may be the result of growing labor cost and sluggish smartphone market in the country.
Reported by Reuters, Samsung will cease its operations at one of its mobile phone manufacturing plants known as ‘Tianjin Samsung Telecommunication Co.’ (TSTC) in China, citing reasons as its sales in the world’s biggest smartphone market are going down amid rising competition from lower-cost Chinese rivals.
“As part of ongoing efforts to enhance efficiency in our production facilities, Samsung Electronics has arrived at the difficult decision to cease operations of Tianjin Samsung Electronics Telecommunication,” Samsung said in a statement, referring to the plant in the northern Chinese city of Tianjin.
The factory is scheduled to be shut down by the end of this year and currently employs about 2600 peoples, the company said it would offer compensation packages to the employees and also provide opportunities to transfer to other Samsung facilities.
Back in August 2018, it was reported that Samsung is reviewing the current situations about Tianjin facility and there will be no more production in Tianjin.
It’s also a factor that Samsung is focusing on its manufacturing plant located in cost-efficient countries including India and Vietnam, and the company will continue to operate another Chinese phone factory in Huizhou, China. As the Manufacturing withdrawal is being only happening to Tianjin Corporation.
according to the South Korean newspaper “Samsung’s Tianjin plant produces 36 million mobile phones a year and the Huizhou plant makes 72 million units, while two of Samsung’s factories in Vietnam combined make 240 million units a year” Although tech giant declined to disclose the capacity of each factory.
“China remains an important market for Samsung and we are actively participating in China’s economic policies by fostering growth in the components industry,” Samsung said.