It's no secret that Samsung has been facing tough competition in the Chinese smartphone market. There's intense competition in the market not only from Apple in the high-end segment but local manufacturers that are targeting customers in all segments of the world's largest smartphone market.
Samsung's market share in China fell below 1 percent yet again in the second quarter of this year. While the company has promised to do more in order to reverse its fortunes, it remains to be seen whether that will actually happen. Perhaps the company is now thinking about cutting its losses as it's reportedly going to shut down one of its two smartphone factories in China.
The struggle continues in China
According to a new report, Samsung is thinking about shutting down one of its two smartphone plants in China due to lackluster sales and increasing labor costs. The company is expected to suspend operations at the Tianjin Samsung Telecommunication (TSTC) factory in Tianjin, northern China as early as next year.
It has reportedly informed its suppliers of this decision. “Samsung says there will be no more orders from Tianjin,” a source told ETNews, adding that “That means suspending production there.”
The factory in Tianjin was set up in 2001 back when Samsung made its big push in China. It played an important role as Samsung's global production hub but was later reduced to cater to the local market as the company shifted production facilities to emerging markets like Vietnam.
Samsung also has a production plant in Huizhou, southeastern China in addition to the Tianjin factory. It may remain the last smartphone factory that Samsung owns in the country if this report is accurate. While the company hasn't officially confirmed the impending shutdown, an unnamed Samsung executive tells the scribe that “We have reduced production at the Tianjin plant and will continue to do so in the future. But we have not yet decided on its shutdown.”