Samsung to close smartphone factory in China

Doris Richards
August 15, 2018

It opened the world's biggest smartphone factory outside New Delhi last month, which is slated to become an export hub.

What happened: Samsung is considering suspending operations at its Tianjin factory due to faltering sales and rising labor costs. The plant - located in Tianjin - will be closed by the end of 2018.

In China the phonemaker has faced particular hardships, watching its market share in the country fall to less than one per cent this year as local brands such as Huawei and Xiaomi continue to outperform.

A slowdown in demand for Samsung's newest phones, the Galaxy S9 and S9 Plus, hurt its second quarter earnings this year, with revenue in its mobile division declining 22 percent in the quarter to 22.67 trillion won ($20.2 billion). This is because people apparently prefer the local competitors' cheaper feature-packed models.

The factory in Tianjin was set up in 2001 back when Samsung made its big push in China. It does not appear that this plant will be closed with that in Tianjin.

Samsung might stop producing mobile phones this year at Tianjin Samsung Telecom Technology, its Chinese mobile phone manufacturing base in Tianjin, the South Korean newspaper said. In comparison, Vietnam is responsible for almost 240 million units.

The Electronic Times reported that the Tianjin Samsung Telecommunication plant to the southeast of Beijing is the most likely sacrifice.

Samsung issued a response to say that nothing has been decided.

Samsung in a statement to Reuters said that the entire smartphone market is facing tough times owing to slow growth.

Other reports by Iphone Fresh

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