Samsung officially closed its last mobile phone manufacturing factory in China.
On October 2nd, it was reported in Reuters that Samsung Electronics said that it had stopped producing mobile phone products in China because of the increasingly fierce competition from domestic competitors in China. This also means that Samsung’s last factory in China, located in Huizhou, Guangdong Province, has also been shut down.
Samsung China responded to the The Paper reporter that Huizhou Samsung Electronics was one of Samsung’s first factories in China in 1992. Considering the current situation of the global mobile phone market, in order to improve the efficiency of global production and operation, it was forced to make a decision to stop production in Huizhou.
"In the past 27 years since entering China, Samsung has followed the industrial guidance direction of the China government and adjusted its industrial layout in time to adapt to the rapid development and changes of the China market. The adjustment of the Huizhou factory is a normal industrial adjustment; Samsung’s industrial layout in China has been transformed into a high-end manufacturing industry in line with the direction of the China Municipal Government. In the past six years, it has continued to invest in high-end industries in China, amounting to more than 20 billion US dollars, far higher than the amount of industrial adjustment, and will continue to invest in high-end industries in China in the future. " Samsung said in a statement.
Samsung said that in view of the problem of employee placement, the company will fully protect the legitimate rights and interests of employees, and properly solve it through various forms such as branch relocation and re-employment support to minimize employee losses.
Since the beginning of this year, there have been media reports that Samsung will continue to shut down this Huizhou mobile phone factory and transfer its production capacity to Vietnam, India and other countries to cope with the pressure of rising labor costs in China. In the low-end market of China, ODM or OEM mode is adopted.
Samsung had previously responded to the media: "Due to the severe market situation and intensified competition in China, we are adjusting the output of Huizhou factory."
Huizhou Samsung Electronics has been pushing the recruitment information of other companies on WeChat WeChat official account for several months to find job opportunities for Huizhou factory employees.
The full name of Samsung Huizhou Factory is Huizhou Samsung Electronics Co., Ltd., which was established in 1992 as a joint venture between samsung galaxy Co., Ltd. and Guangdong Huizhou Real Estate Corporation. It was officially put into production in September 1993 with a registered capital of $32 million. Mobile phone production was introduced in 2006, and now it has developed into 40 GSM/CDMA/3G mobile phone production lines and more than 30 SMD automatic production lines. The products MAINly include main audio, DVD home theater, mobile phone and other products, with a factory area of 120,000 square meters and a construction area of 35,000 square meters.
In recent years, Samsung’s mobile phone sales in China’s domestic market are not good, and it is impossible to provide enough orders to the China factory; However, the high cost of the China factory made it impossible to receive orders from other Samsung markets, which led to a difficult situation for the China factory. In December last year, Samsung closed the Tianjin mobile phone factory.
A few days ago, the market research company Strategy Analytics released a report saying that Samsung Electronics’ share in China’s smartphone market in the second quarter was less than 1% due to the influence of more China consumers choosing to buy domestic smartphones. In 2013, Samsung’s smartphone market share in China once reached about 20%.
Samsung has also said that it is reorganizing and matching global industries, and the specific measures are to transfer intensive factories to countries with lower labor costs.
Regarding the closure of Tianjin mobile phone factory, Samsung said that it actively eliminated backward production capacity, and at the same time, it vigorously increased investment in high-tech industries and added high-end manufacturing projects such as MLCC (multilayer ceramic capacitors) and new energy power batteries. Among them, the MLCC plant is expected to be completed by the end of this year. By then, Tianjin will become one of the major overseas production bases of Samsung Electric, providing basic electronic components for mobile phones, computers, automotive electronics and other equipment worldwide, greatly improving the level and internationalization of the electronics industry in Tianjin.
Huang Degui, president of Samsung Greater China, recently told People’s Daily that Samsung has become an important participant in the high-quality development of China’s manufacturing industry. "In the future, Samsung will continue to provide China consumers with an important driving force for a better life through technological breakthroughs and high-tech products. At the same time, it will continue to adapt to the development and changes of the China market, strengthen reform and innovation, accelerate transformation and upgrading, and strive to achieve high-quality development."
The Paper reporter Ling Zhou
