Samsung Electronics Co Ltd, the leading manufacturer and distributer of electronic products has reportedly made plans to suspend its operations at its mobile phone manufacturing plants in China. As per sources, the decision may have come on the heels of the company’s rising labor cost and slumping sales.
An official statement claims that Samsung, in all probability, may stop its smartphone production operations at the Tianjin Samsung Telecom Technology located in the northern Chinese city of Tianjin, South Korea this year.
Reportedly the company claimed in a statement to the CNBC, that the overall global smartphone market is currently struggling due to a slow growth in smartphone sales. However, with regards to the Tianjin plant, the South Korean smartphone maker stated that the fate of its Tianjin operation has not yet been decided.
As per reports, Samsung had a 20% share in the China market merely half a decade earlier, which fell by nearly one percent this year, plausibly due to the arrival of new players like Xiaomi, Huawei and other Chinese brands.
Apparently, Samsung Electronics Co Ltd is under pressure to kickstart its smartphone sales after encountering its slowest quarterly profit growth on account of rival players that are attracting customers with smartphones deemed to be cheaper and loaded with features similar to premium smartphones.
For the record, Samsung has invested a huge chuck of capital in its Vietnam and Indian production facilities. Sources cite that the company has recently opened the world’s biggest smartphone factory situated outside New Delhi, which aims to become a major export hub.
According to reliable reports, Samsung’s Tianjin plant produces 36 million smartphones a year, whereas the company’s second phone manufacturing plant in Huizhou manufactures 72 million units a year. The company’s two plants in located in Vietnam, combinedly account for about 240 million units annually.