Tough competition forces Samsung to shut down factory in China

Samsung has shut down a mobile manufacturing plant in Tianjin, China as part of a global ‘streamlining’ strategy. However, it is safe to assume that the increasing competition in China due to companies like Huawei, Xiaomi, and others is taking its toll on Samsung. The factory employed more than 2,600 people who will be offered compensation packages and opportunities to move to other Samsung plants in the country.

A representative from Samsung issued the following statement:

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.

If we compare Samsung’s progress with its competitors, Xiaomi has been making great strides towards getting its business offline by opening more than 500 stores in a single day plus their revenues have greatly increased. Huawei is going just as good. Chinese manufacturers are continuing to challenge the superiority of Samsung and Apple phones with roughly the same specifications at a lower price tag.

If the competition continues to go at its current pace, it is possible Samsung will have to devise a different strategy to stay in battle. They currently have a larger production plant in Huizhou that will remain operational but the question is for how long?