Samsung ceases handset production in China

Samsung Electronics has stopped its mobile phone production operations in China, according to Reuters, closing its last factory in the country in an effort to increase efficiency.

The move follows Samsung’s decision late last year to halt production at its facility in the Chinese city of Tianjin, and in June it ended operations at a plant in Huizhou amid stiff handset competition from Chinese rivals like Huawei and Xiaomi. 

Samsung said it had made the difficult decision to stop manufacturing in the country, but the world’s leading handset maker will continue sales in China, according to Reuters.

“The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs,” the company said in a statement published by the news outlet.

Samsung’s Huizhou plant reportedly employed 6,000 workers and in 2017 produced 63 million handset units.

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In August, Strategy Analytics noted that Huawei had expanded its market share in China to almost 40% by the second quarter of 2019. Samsung, meanwhile, though still the clear global leader, held only a 1% share of the Chinese phone market, according to the firm.

Facing rising labor costs and economic downturn, Reuters noted that Samsung in recent years has expanded smartphone manufacturing to countries like India and Vietnam.

Rival smartphone maker Apple also reportedly has considered shifting some of its smartphone hardware production out of China in reaction to the ongoing U.S.-China trade battle.  In June, Nikkei citing unnamed sources, reported that the iPhone maker had asked its major supplier to evaluate costs of moving between 15% and 30% of production capacity from China to Southeast Asia.