Samsung is thinking about suspending operations at one of its mobile phone manufacturing plants in China. The company is considering this decision owing to the falling sales and increasing labour costs, as per the reports of Electronic Times on Monday.
Samsung might even stop making mobile phones this year at the Tianjin Samsung Telecom Technology, which is located in the Chinese city of Tianjin. The South Korean newspaper reported this while describing the decision as a potential withdrawal which is under consideration.
On Monday, Samsung—the world’s largest smartphone manufacturer said that so far nothing definite has been decided regarding the fate of its Tianjin operations.
Samsung in a statement to Reuters said that the entire smartphone market is facing tough times owing to slow growth. Samsung Electronics’ Tianjin telecom enterprise has got the objective of focusing on the activities that may lead to an increase in efficiency and competitiveness.
Five years back, Samsung had twenty per cent of the Chinese market share only, this year that share has been reduced to just one per cent, taken over by Huawei, Xiaomi and some other Chinese smartphone brands, particularly on the cost of the phones.
Samsung is also under pressure to start increasing its smartphone sales after it suggested its slowest quarterly profit growth in more than a year, the rival makers of smartphone took the lead due to cheaper feature-packed phones.
Alongside the Tianjin plant, the South Korean tech giant might also consider suspending operations at another Chinses phone plant in Huizhou.
In recent times, the focus of the tech giant is on the production plants in India and Vietnam, where Samsung has focused its major smartphone investments. Last month, it opened the world’s biggest smartphone plant outside New Delhi.
As per the Electronic Times, Samsung’s Tianjin and Huizhou plants in China produces 36 and 72 million mobile phones per year, respectively, whereas the two factories in Vietnam combined to produce 240 million units of mobile phones per year.