Samsung reportedly to reduce smartphone production proportion in Vietnam to 40%

Jill Lai, DIGITIMES Asia, Taipei 0

Credit: AFP

Localized and diverse production bases have become an inevitable approach for manufacturers to reduce geopolitical risks or supply chain disruption. Samsung also actively diversifies its smartphone production in multiple countries, such as Vietnam, India, Brazil, Indonesia, and Turkey. Vietnam is currently the biggest production base for Samsung's phones.

According to Korean media etnews, Samsung will continue to diversify its global production bases. It is reportedly to reduce the proportion of its smartphone production in its Vietnam factory from 50% this year to 40% next year. Last year, Samsung Vietnam even accounted for 60% of its total smartphone production. Samsung's Vietnam production usually supplies the markets in North America and Europe.

Vietnam's rising labor costs and the slowdown of the global consumer market are considered the main reasons behind Samsung's recent move.

Samsung Vietnam currently has 6 factories in Bac Ninh, Thai Nguyen, and Ho Chi Minh City, an R&D center in Hanoi, and a sales entity, according to Viettonkin Consulting, based in Vietnam. Samsung is also one of the biggest investors in Vietnam, which makes the country a hub of global phone production.

In the future, Samsung's production base in India will account for 21% or 68 million units of Samsung's total smartphone production, while Brazil will account for 23 million units or 7%. Indonesia and South Korea will account for 3% each and Turkey and Egypt will account for a combined 1%, according to another Korean media The Elec.

Samsung already shut down its smartphone factory in China in 2019. Samsung's joint development manufacturer (JDM) in China aims to increase its production volume to account for 18% of the total with 60 million units, according to The Elec.