Samsung Electronics says to cut production volume at China mobile phone plant

FAN Editor
The logo of Samsung Electronics is pictured at the company's factory in Tijuana
The logo of Samsung Electronics is pictured at the company’s factory in Tijuana, Mexico, June 1, 2019. REUTERS/Jorge Duenes

June 5, 2019

SEOUL (Reuters) – Samsung Electronics Co Ltd said on Wednesday it has decided to cut the volume of mobile phone production at its plant in the Chinese city of Huizhou due to the impact of intensifying competition in the country.

Samsung’s statement followed a report by financial magazine Caixin saying the firm had offered voluntary redundancy for some employees at the factory.

Samsung declined to further comment on the amount of the planned reduction volume when contacted by Reuters.

Its share price was 1.3% higher at midday, while the broader KOSPI market was up 0.4%.

Samsung, the world’s biggest smartphone maker, has seen its share of the Chinese market shrink to less than 1% last year, losing out to local brands like Huawei Technologies Co Ltd, showed data from Strategy Analytics, which pegs Samsung’s share at about 20% in 2013.

However, the South Korean firm’s smartphone sales volume in China increased by 40% in the first quarter of this year from the previous quarter, helped by cost-effective smartphone models, a Counterpoint Research report showed in late April.

Samsung ceased operations at a mobile phone plant in the city of Tianjin in December to enhance production efficiency.

(Reporting by Heekyong Yang; Additional reporting by Brenda Goh; Editing by Darren Schuettler and Christopher Cushing)

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