Samsung Electronics, which is suffering from a severe slump in sales and labor costs in the Chinese smartphone market, will stop operating its Tianjin production plant at the end of this month.
Until 2014, Samsung Electronics was the top smartphone manufacturer in China with a market share of 19%. However, its market share dropped to 0.7 percent in the third quarter of this year owing to the chase of Chinese products such as Huawei and Xiaomi. Its sales of nearly 20 million units per quarter also dropped to 700,000.
"Samsung Electronics seems to have felt burdened by continuing operation of its factories at a time when its market share for its smartphone is decreasing." said a Chinese media outlet.
Meanwhile, a Samsung Electronics official said, "We had a briefing session on the stoppage of production for local employees. The decision was made to efficiently operate smartphone production plants around the world. As the Tianjin plant has a low operation rate, there is no problem in supplying our products."
As a result, Samsung has only one smartphone production facility in Huizhou, China. Some analysts say that Huizhou's plant will either reduce production or withdraw in the future. Samsung Electronics is currently operating its smartphone factories in six countries, including China, India, and Vietnam.
