Samsung has closed its last plant in China – production at the facility in Huizhou reduced a few months ago and has now been completely shut down, according Reuters.
In 2017 the Huizhou factory manufactured 64 million phones, a significant fraction of Samsung’s global output of 394 million. In 2011, this factory made 70 million phones while the one in Tianjin produced 56 million (the Tianjin facility was shut down late last year).
The closure doesn’t mean that Samsung is pulling out of the country, it will continue selling phones there. However, the stiff competition from local brands means that it’s no longer economically viable to make its phones there.
The Korean company’s market share has dropped to 1% as Chinese consumers turn to their own local brands for affordable devices, then look to wards Huawei and Apple for premium models, according to Park Sung-soon, an analyst at Cape Investment & Securities.
The production equipment from the factory will be moved to other facilities around the world. The company has been expanding its production capacity in countries like India and Vietnam due to the lower cost of manufacturing there.
Samsung’s Chinese sales may be made up of ODM devices in the future – the Galaxy A6s was its first ODM phone, followed up by the Galaxy A10s. ODM means that the phones are manufactured by non-Samsung factories under license. The A10s, for example, is made by Jianxing Yongrui Electron Technology. Previously, Samsung announced plans to ship 40 million ODM phones.
Samsung is not the only one in this as Sony has already closed down its Beijing smartphone plant earlier this year.