Amidst deepening issues between China and the US, Samsung Electronics' China sales have shrunk significantly, hitting an all-time low in Q1 2023. As per the latest quarterly report, the proportion of Samsung's China sales has dropped to a single digit, which isn't a good sign for the South Korean technology giant.
In the quarterly report, Samsung's sales were KRW 5.5652 trillion (roughly $4.161 billion) in Q1 2023 in China. This was just about 8.73% of its total sales of KRW 6.37 trillion (approx. $4.76 billion), registering the lowest quarterly numbers ever. The share of sales generated by Samsung's Chinese subsidiaries has declined every year.
Samsung might have started packing its business in China
In 2019, sales reached 18.06% and fell below 8% this year, following 16.29% in 2021 and 11.78% in 2022. Samsung's overall sales, including its Chinese HQs and subsidiaries, plummeted by 46.7% to KRW 7.91 trillion (roughly $5.91 billion) from KRW 14.96 trillion (approx. $11.10 billion) the previous year.
This sharp decline is contributed by various factors along with global uncertainties, including the major US-China conflict. The Chinese public's unfavorable opinion of Korean companies, including Samsung, also contributed to the decline in Samsung's China sales. The Chinese economy also froze after the massive COVID-19 outbreak. Also, US's favorable policies have attracted the likes of Samsung and SK Hynix, and Samsung's gradual withdrawal from China could be a reality.