Samsung to end manufacturing of smartphones in China

China and US trade has to lead the economy on roller coaster ride for the past many months. A new addition to the problem is the movement of technological companies outside China. The labor cost is quite high in China along with the trade war which has lead many companies to set up their firms in countries other than China where labor cost is less and the market is flourishing.

Recently, Pixel manufacturing has been moved by Google to Vietnam. Apple has also decided to move its manufacturing unit from China to South East Asia. Apple has asked its major suppliers to calculate the cost of implications for shifting 15% to 30% of its production outside China. The beleaguered sale of Samsung mobiles has made Samsung to shut down its factory in China.

According to a report from Reuters, Samsung has ended the production of all smartphone units in China. Samsung reports that the bad sale of the smartphone along with the growing market of Huawei and Xiaomi has to lead to Samsung declination in China. Huawei and Xiaomi devices have seen exponential growth in their sales in China.

“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 will still sell its smartphones in the China market but the manufacturing will be done in other countries. Samsung has already started manufacturing 50% of its smartphones in Vietnam since 2015. In 2018 Samsung opened one of the largest phone manufacturing plants in Noida, India.

“The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs,” Samsung said in a statement.