SEOUL/BEIJING -- South Korea's Samsung Electronics will shut down smartphone production in the Chinese city of Tianjin as a plunge in sales keeps much of the factory's capacity idle.
Handset production will end Dec. 31 at the plant, which also makes other electronic devices and has a staff of about 2,000, according to company sources. Workers have been informed of the decision, but arrangements for those who may lose their jobs have not been announced.
The company will continue making smartphones at another Chinese plant, in the Guangdong Province city of Huizhou.
Samsung kept the smartphone crown in China during the rapid market expansion in early 2010s by offering a broad lineup ranging from low-priced to high-end handsets. In 2013, when Samsung had more than a 20% share in the Chinese market, the Tianjin plant was the mainstay, generating an annual 15 trillion won ($13.3 billion) in sales. But the figure quickly dropped by half in 2015 under competition from local players like Huawei Technologies, which has become No. 2 in the world.
Last year, Samsung's share in smartphone shipments in China was a mere 2%, putting it in eighth place, according to Chinese consultancy Sigmaintell.
Globally, Samsung has managed to remain the leader, with a 20.3% share in the July-September period, U.S. research company IDC says. But the share has declined 1.8 points on the year. Chinese manufacturers are quickly catching up even in places like India, long a Samsung stronghold.
Smartphone shipments worldwide fell for four straight quarters through July-September. As Samsung loses its edge in the plateauing market, a prolonged slump may call for further streamlining. Currently, Samsung produces smartphones in countries including China, South Korea, India and Vietnam. Vietnam is the largest hub, accounting for 40% of the output in 2018.