Recently, reports out of China suggests that Samsung, the world’s largest smartphone manufacturer, has recently started staff layoff at its last mobile phone factory in China. The layoffs are voluntary and the deadline for employees to register voluntarily is June 14. Although Samsung declined to comment on the details of planned smartphone production cuts, recent reports show that due to increased competition in China’s domestic market, the company has decided to cut the smartphone production at the Huizhou factory.
According to market research firm Strategy Analytics, Samsung, the world’s largest smartphone maker, shrank its share of the Chinese market to less than 1% last year, lagging behind local brands such as Huawei. In 2013, Strategy Analytics expects Samsung’s share of the Chinese market to be approximately 20%. However, another market research firm, Counterpoint Research, released a report at the end of April that Samsung’s smartphone sales in China increased 40% in the first quarter of this year, thanks to the introduction of more cost-effective smartphones.
In December 2018, in order to improve production efficiency, Samsung stopped operating a mobile phone factory in Tianjin. It is reported that the Huizhou factory was established in 1992, is a joint venture company controlled by South Korea’s Samsung Electronics Co., Ltd., and introduced the smartphone production line in 2006. According to public information, in 2017, the Huizhou factory produced a total of 62.57 million mobile phones, accounting for 17% of the total global production of Samsung mobile phones that year.
Obviously, the Chinese smartphone market is becoming difficult for South Korean manufacturer. Sometime last year, LG, a South Korean company left the Chinese smartphone market due to increased competition.