Some time ago we heard that Samsung was considering discontinuing operations at its smartphone manufacturing plant in Tianjin, China, possibly due to the decrease in sales and the increase in labor costs.
The company did not confirm the information at that time, although it did say that the “general smartphone market is struggling due to the slowdown in growth.”
Now, the South Korean technology giant has confirmed to Reuters that it will close that facility as it has difficulties competing in the country with local manufacturers of smartphones such as Huawei, Vivo, OPPO or Xiaomi.
As part of ongoing efforts to enhance efficiency in our production facilities, Samsung Electronics has arrived at the difficult decision to cease operations of Tianjin Samsung Electronics Telecommunication
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“The company doesn’t need to stay in China because of rising labour cost and its almost non-existent Chinese market share. They can be better off in India and Vietnam,” said Greg Roh, a senior analyst at Hyundai Motor Securities.
The Tianjin manufacturing plant, which employs nearly 2,600 people, will close before the end of the year. Affected employees will receive compensation packages and will be given the opportunity to work at other Samsung facilities.
In any case, its factory in Huizhou, Guangdong, will continue to operate, at least for the time being, since Samsung is moving most of its production to Vietnam and India.