Samsung Shutting Down Factory in China
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14 December 2018 15:38 WIB
TEMPO.CO, Jakarta - South Korea`s Samsung Electronics plans to stop the operations of one of its cell phone factories in China. The decision is based on declining sales due to competition from local producers, and as part of efficiency in production, the company official says.
"Samsung Electronics is faced with a difficult decision to stop operations at Tianjin Samsung Electronics Telecommunication," Samsung said in an official statement Reuters quoted on Thursday, December 13.
The South Korea, tech giant must compete with local players in the Chinese market including Huawei. Counterpoint's analysts said Samsung's market share in China slipped to 1 percent in the first quarter of this year.
The factory in Tianjin employs some 2,600 workers. It is scheduled to shut down at the end of this year. Samsung will provide compensation to employees, as well as give them the opportunity to work in Samsung offices elsewhere.
Samsung is keeping its other factory in Huizhou, Guangdong.
A senior analyst from Hyundai Motor Securities, Greg Roh, believes Samsung does not need to be in China because of high labor wages. According to Roh, it is better for Samsung to build factories in India and Vietnam.
ANTARA
