Samsung Mulls Halting Tianjin Production as Smartphone Market Slows Down
Xu Wei
DATE:  Aug 14 2018
/ SOURCE:  Yicai
Samsung Mulls Halting Tianjin Production as Smartphone Market Slows Down Samsung Mulls Halting Tianjin Production as Smartphone Market Slows Down

(Yicai Global) Aug. 14 -- Samsung wants to make its northeast China production unit more efficient and competitive as growth in the smartphone sector slows down, the South Korean electronics maker has said in response to reports that it will suspend operations at its Tianjin factory.

Rapidly declining sales and rising labor costs are forcing the firm to consider pausing operations at Tianjin Samsung Telecom Technology, South Korea's Electronic Times reported yesterday, labeling the temporary shutdown as a potential withdrawal. The factory is responsible for a third of Samsung's phone manufacturing in China, or 36 million units a year, with the remainder taking place a facility in Huizhou, Guangdong province.

China's smartphone market, the world's largest, saw annual shipments slide for the first time last year, dipping 4 percent to 459 million after a 17 percent dive in the fourth quarter, according to a January report by market researcher Canalys. One insider told Yicai Global at the time that smartphone users are now keeping their handsets for longer -- about 23 months -- but sales will surge when China commercializes 5G networks next year.

Samsung ranked 12th among smartphone makers in China in the second quarter of this year after selling just 800,000 handsets, according to data from Strategy Analytics. Five years ago it commanded a 20 percent market share, but that has since dwindled to 0.8 percent.

The firm has already begun taking its production to India and Southeast Asia -- it now produces about 240 million phones a year in Vietnam, and plans to build the world's largest handset factory in New Delhi and build it into an export center.

Editor: James Boynton

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Keywords:   Samsung Electronics,South Korea,Tianjin