Original title: Samsung Electronics: the last Chinese mobile phone factory was shut down at the end of September
According to Reuters, South Korea's Samsung Electronics recently announced that it had stopped producing mobile phones in China at the end of September and closed Samsung's mobile phone factory in Huizhou, Guangdong Province. The company said the move was to improve efficiency. However, Samsung also said that the company will continue to sell Samsung mobile phones in China.
At the end of 2018, due to the sharp decline in sales and rising labor costs, Samsung closed its factory in Tianjin. Since then, Huizhou factory has become Samsung's last mobile phone factory in China. In June this year, some media reported that Samsung had started the layoffs of Huizhou Samsung Electronics Co., Ltd., reduced the output of Huizhou factory, and said that Samsung planned to close Huizhou factory in September 2019.
Huizhou Samsung factory, located in Chenjiang Town, Huicheng District, Huizhou City, was established in 1992 and officially put into operation in 1993. It is Samsung's main production base in China. The total investment is 190.7 million US dollars, with a plant area of 120000 square meters and a construction area of 35000 square meters. In June 2019, the production capacity of smart phones in the factory was about 400000 units per month. Samsung did not give the latest figures on the capacity and number of employees of the Huizhou plant. According to South Korean media, Samsung employed 6000 employees and produced 63 million mobile phones at its Huizhou plant in China in 2017.
According to Samsung related sources, the main reason why Samsung closed its last Samsung mobile phone factory in Huizhou in China is that the sales of Samsung mobile phones in the Chinese market has been depressed; The second is the rising labor costs in China. Samsung is also preparing to move its mobile phone factories to Vietnam, India and other places. At present, Samsung has officially determined to build two mobile phone factories in Vietnam to produce Samsung mobile phones. It is reported that after the completion of these two factories, it will produce up to 150 million Samsung mobile phones every year.
In addition, according to surging news reports, SamSung China said that Huizhou Samsung Electronics was one of the factories initially established by Samsung in China in 1992. Taking into account the current situation of the global mobile phone market, in order to improve the global production and operation efficiency, it had to make the decision to stop production of Huizhou factory.
"In the past 27 years since entering China, Samsung has followed the industrial guidance of the Chinese government and timely adjusted the industrial layout to adapt to the rapid development and changes of the Chinese market. This adjustment of Huizhou factory is a normal industrial adjustment; Samsung's industrial layout in China has been transformed into a high-end manufacturing industry in line with the guidance of the Chinese government. In recent six years, Samsung has continued to invest in high-end industries in China, with an amount of more than US $20 billion, much higher than the amount of industrial adjustment. In the future, Samsung will also continue to invest in high-end industries in China. " Samsung said in a statement.
Samsung said that for the problem of employee placement, the company will fully protect the legitimate rights and interests of employees and properly solve it through various forms such as branch relocation and reemployment support, so as to reduce employee losses as much as possible.
As the world's largest smartphone manufacturer, Samsung's market share in China is declining. Counterpoint, a market research company, said that in the first quarter of this year, the market share of Samsung mobile phones in the Chinese market has shrunk to 1% from about 15% in mid-2013, and the market sales are even inferior to some second-line mobile phone brands. At present, most of the mobile phone market in Greater China is divided up by Huawei, Xiaomi and other companies.
In July this year, Samsung released its financial results for the second quarter ended June 30, 2019. According to the financial report, the revenue of Samsung Electronics in the second quarter was 56.1 trillion won (about US $47.5 billion), down 4% from 58.48 trillion won in the same period last year; The operating profit was 6.6 trillion won (about US $5.59 billion), down 55.6% from 14.87 trillion won in the same period last year; The net profit was 5.18 trillion won (about US $4.4 billion), down 53.1% from 11 trillion won in the same period last year. Samsung pointed out in the report that the net profit in the second quarter fell year-on-year, mainly due to the weak price of memory chips and the depression of mobile business. At the same time, the second quarter was also the third consecutive quarter in which Samsung Electronics' net profit fell year-on-year.