Korean smartphone giant Samsung may shutter operations at one of two device factories in China as a result of escalating labour overheads and waning sales in the market.
The Electronic Times reported that the Tianjin Samsung Telecommunication plant to the southeast of Beijing is the most likely sacrifice. Samsung also has a plant in Huizhou that it could wind up instead.
Either way, the factory could be shut down by next year to allow the manufacturer to realign its focus towards growth markets such as India. Samsung has reportedly notified some of its main suppliers that it intends to cease operations in one of the plants.
While Samsung is the top vendor in a number of global markets, in China it does not make the top five. With IDC data showing that smartphone shipments in China dropped by 5.9% year-on-year in the second quarter and further declines expected, it could be prudent for Samsung to shut down a factory, with one representative from the firm stating: “The production volume of the Tianjin [plant] has been steadily decreasing and it is expected to decrease in the future.”
Last month, Samsung stepped up its efforts to double its handset production in India, commencing manufacture at an overhauled factory in the north of the country. India is the second largest smartphone market in the world after China, and Samsung is keen to secure a high position in the market, as well as export Indian-made devices overseas.