In a significant development that underscores a growing trend of companies leaving China and relocating to neighboring countries, Samsung Electronics Co Ltd stated, it has stopped the production of mobile telephones in China.
The permanent shuttering of Samsung’s last China phone factory comes in the wake of it cutting production volumes at its plant in the southern Chinese city of Huizhou in June 2019; Samsung also suspended the production of at another of is factory in China in 2019, citing stiff competition.
Other manufacturers have also shifted production bases out of China citing rising labor costs and economic slowdown.
In a statement, Sony said, it was closing its smartphone plant in Beijing and will relocate it in Thailand.
“In China, people buy low-priced smartphones from domestic brands and high-end phones from Apple or Huawei. Samsung has little hope there to revive its share,” said Park Sung-soon, an analyst at Cape Investment & Securities.
Samsung, the world’s No.1 smartphone maker, said it had taken the difficult decision in a bid to boost efficiency; it also added, its distribution and sales support network could continue in China.
“The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs,” said Samsung in a statement without elaborating.