Samsung to shut Tianjin mobile phone factory as its Chinese market share slumps and manufacturing costs rise
- Samsung has fallen from No 1 five years ago to less than 1 per cent market share as it faces intense competition from Chinese rivals
Samsung Electronics will shut its mobile phone factory in the Chinese city of Tianjin amid slumping sales in the country and rising labour costs.
The factory, known as Tianjin Samsung Electronics Telecommunication, was one of two mobile phone manufacturing plants the company operates in mainland China, the other being in Huizhou, Guangdong.
The Korean tech giant confirmed the closure on Wednesday after local Chinese media reported that workers at the plant said on social media platforms that they received verbal notification that the operation would cease on December 31, 2018.
“As part of ongoing efforts to enhance efficiency in our production facilities, Samsung Electronics has arrived at the difficult decision to cease operations of Tianjin Samsung Electronics Telecommunication (TSTC),” Samsung said in an emailed reply to a request for comment. “Samsung is extremely grateful for the devoted support of our employees and we are committed to providing a fair and reasonable compensation package that includes career counselling and vocational training while opportunities to transfer to other Samsung facilities will also be made available where possible. “
As of last month there were 2,600 people employed at the TSTC facility, according to the company, which declined to elaborate when asked about the impact the job losses will have on the local economy.