Samsung to move its smartphone production line away from Vietnam

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ETnews recently reported Samsung Electronics has transferred some global smartphone production lines to the Gumi factory in Gumi, Gyeongsangbuk-do, South Korea. This is a special measure taken after its main factories in Vietnam and other countries experienced production setbacks. The global production setback is due to the coronavirus pandemic. The reports claim that Samsung Electronics has since transferred the production since the end of 2021. This is the first time that the Gumi plant is increasing its production capacity.

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Currently, Samsung Electronics’ annual output of smartphones is about 300 million units. Among them, the two factories in Bac Ninh and Tai Ninh provinces in Vietnam are the largest production bases. These factories account for about 60% of Samsung’s total smartphone production. The Noida plant in India also has a production capacity of 100 million units. In addition, the company also has factories in Brazil and Indonesia that are adjusting their capacity according to local demand.

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COVID-19 had a huge impact on Samsung’s production

Samsung Electronics’ only mobile phone production base in South Korea, the Gumi plant specializes in the production of foldable smartphones. It also focuses on the production of flagship series such as the Samsung Galaxy S series. Nevertheless, the Gumi plant’s share of Samsung Electronics’ total production has been declining.

However, since last year, Samsung Electronics’ global manufacturing bases in Vietnam and other locations have been shut down due to the coronavirus pandemic. In fact, there have been significant production disruptions through most parts of the year. 

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As a special measure of supply chain management, the company seeks to “return” its production capacity. The way to do this is to move its global production lines back to its home country, South Korea. At the same time, aware of the need to increase the level of supervision and production of high-end smartphones, Samsung Electronics had to relocate the production line to the Gumi factory at the expense of increasing manufacturing costs. According to reports, most of the flagship smartphone Galaxy S22 series which will ht the market will come out of the Gumi factory.

In addition to “reflowing” to the Gumi plant, Samsung Electronics controls the output of each global plant. Furthermore, by distributing smartphone production, which is mostly in Vietnam, around the world, it can minimize losses even if factories in specific regions close. Samsung Electronics is recommending the diversification of its global factory production capacity to some major suppliers.

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