ICCK

Samsung Electronics Co. will shutter one of its mobile phone plants in China as it grapples with slumping sales in the country amid intensifying competition from local rivals. 

The company said Wednesday it has informed its employees at Tianjin Samsung Electronics Telecommunication in northern China of its plan to close down the plant by the end of this month. It has two mobile phones factories in China – Tianjin and Huizhou, in the southern province of Guangdong. 

The latest decision comes after the South Korean smartphone giant has seen its share in the Chinese smartphone market dip to 0.8 percent in the second quarter ended June this year after losing ground to local Chinese brands such as Huawei, according to market research firm Strategy Analytics. It was a drastic change from a few years ago when Samsung Electronics enjoyed an about 20 percent market share in the world’s largest smartphone market. 

During the Samsung Developer Conference held in San Francisco last month, Koh Dong-jin, chief of the company’s IT & mobile communication business, hinted at the possible shutdown of the Tianjin plant, saying that the company is flexible on its production plan that can be changed in line with the changing market conditions. 

The decision is also part of the electronics maker’s plan to reshape its mobile phone production strategy. In October, the company consigned the production of the Galaxy A6s budget smartphone model to a local Chinese original design manufacturer (ODM). 

It also has been expanding smartphone production output at its factories in Vietnam in India. In July, the company finished ramping up its factory in Noida to roll out up to 120 million smartphones annually by the end of 2020. 

In Vietnam, it produces smartphones in two plants. Market experts estimate the two Vietnamese plants churn out 150 million units or nearly half of the company’s total global smartphone shipments. 

The company has total nine mobile phone plants in six countries across the world – two in China, including Tianjin plant, two in Vietnam, one in India, two in Brazil, and one in Indonesia. Vietnam and India factories are responsible for 67 percent of the company’s total mobile phone production, and China 20 percent. 

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