Samsung was revealed to be considering suspending operation of Tianjin mobile phone factory: the smartphone market is facing difficulties
There are mainly two production plants for Samsung mobile phones in China: one is Tianjin Samsung Communication Technology Co., Ltd. in Tianjin, and the other is Huizhou Samsung Electronics Co., Ltd.. According to South Korea’s 'Economic Daily NewsThe current Korean media reports do not involve the next fate of Samsung's Huizhou factory. According to the company’s data, Tianjin Samsung Communication Technology Co., Ltd. was established in 2001. Samsung Electronics Co., Ltd. holds 90% of the shares and Tianjin Zhonghuan Electronic Information Group Co., Ltd. holds 10%. The company’s business scope includes development, production, and sales. Mobile phone terminals, data communication multimedia products, access network communication system equipment, broadband integrated service digital network equipment, new electronic components, telephones, portable microcomputers, cameras, etc. One of the backgrounds behind the news that Samsung is considering closing the Tianjin factory is the decline in sales of Samsung's mobile phones in the Chinese market in recent years. Samsung, which has encountered difficulties in the Chinese market, has been exposed to considering closing its mobile phone manufacturing plant in Tianjin. On August 13, according to Reuters' Chinese website, the Korean Electronic Times reported on Monday that Samsung Electronics is considering suspending the operation of the mobile phone manufacturing plant of Tianjin Samsung Communication Technology Co., Ltd. due to a sharp drop in sales and rising labor costs. One of the mobile phone production bases in China. In response, Samsung Electronics responded: “Due to the slowdown in growth, the entire smartphone market is facing difficulties. Samsung Electronics’ Tianjin Communication Technology Company plans to focus on activities that can improve competitiveness and efficiency.” Samsung China did not give further details. Response. As the world's largest smartphone manufacturer, Samsung mobile phones have encountered strong challenges from local brands in the Chinese market in recent years. Recently, the market research organization Strategy Analytics released a report on the Chinese smartphone market for the second quarter of 2018, which stated that Samsung only sold 800,000 smartphones in China during the quarter, ranking 12th. After the Galaxy S9 was released in the first quarter of this year, Samsung's share of the Chinese mobile phone market once rebounded to 1.3%, but in the second quarter it fell back to 0.8%, which was the same as the fourth quarter of 2017. And five years ago, Samsung's share of the Chinese smartphone market was as high as 20%. Today, a large number of market shares are occupied by Huawei, OPPO, vivo, Xiaomi and other Chinese mobile phone brands. If the Chinese market is unable to digest factory production capacity, coupled with rising manufacturing costs, it seems not difficult for Samsung to seek adjustments to its Chinese factories. In April of this year, Samsung closed the Samsung Electronics Communications Company in Shenzhen. This factory was originally responsible for the production of CDMA mobile phones, but later transformed to produce network equipment. But this factory is small, with only 300 employees. In recent years, Samsung has been relocating low-end manufacturing to countries and regions such as Southeast Asia and India. It is reported that Samsung's two factories in Vietnam produce a total of 240 million mobile phones each year. Not long ago, Samsung just announced the opening of the world's largest smartphone factory in the suburbs of New Delhi, India. The factory is expected to become an export center. Another background of Samsung's business layout adjustment in China is the upgrading of China's industrial structure. A Samsung insider said that the adjustment of some low-end manufacturing businesses does not mean that Samsung does not pay attention to the Chinese market. Some high-end manufacturing businesses will continue to invest in China to comply with China's industrial upgrading trend. From the perspective of Samsung's investment map, Xi'an, China, is the capital of Samsung's semiconductor investment. In March of this year, the second phase of Samsung (China) semiconductor memory chip project officially started in Xi'an. This is another large investment by Samsung in the Chinese market after the first phase of investment of US$10 billion in 2012. In addition to semiconductor chips, Samsung's high-tech businesses such as LCD panels and car batteries also have important layouts in China. In early May of this year, Samsung Vice President Li Zairong met with BYD Chairman Wang Chuanfu, Huawei President Ren Zhengfei, Xiaomi CEO Lei Jun, and vivo CEO Shen Wei. According to South Korea’s 'Joongang Ilbo' report, Samsung’s core management, including Samsung Electronics CEO Kim Ki-nam, storage business leader Kim Qiao-young, system LSI business leader Kang In-yeop, and Samsung Display CEO Lee Dong-hoon, also followed Lee Jae-yong. To Shenzhen. Industry insiders believe that Samsung's next focus in the Chinese market will shift to the upstream industry chain with stronger technological advantages.