Samsung revealed plans to shut one of its mobile manufacturing facilities in China at the end of this year as domestic rivals eat into its market share, Reuters reported.
The smartphone vendor told the news outlet it made the “difficult decision” to close its Tianjin plant as part of “ongoing efforts to enhance efficiency in our production facilities”.
Around 2,600 people are currently employed at the Tianjin factory. A separate mobile manufacturing plant in the Chinese city of Huizhou will remain in operation, Reuters said.
The news follows reports in August which suggested Samsung might make such a move in the face of falling earnings from its mobile division as it faced stiff competition from rivals and weaker-than-expected sales of its Galaxy flagship line.
The Electronic Times noted the Tianjin facility produces 36 million mobile phones per year, half the output of the Huizhou plant. Two other Samsung facilities in Vietnam are responsible for a combined 240 million devices each year.
Research company Canalys reported Samsung was the only smartphone vendor to record a fall in global shipments during Q3, with a 14 per cent drop. The vendor’s market share also declined from 22 per cent in Q3 2017 to 20.4 per cent in the recent period.
Meanwhile, Chinese rivals Huawei, Xiaomi and Oppo all gained ground, with the latter two holding their highest-ever share of global smartphone shipments.
The move also comes as rising labour and component costs in China, and global political tensions put even greater pressure on vendors operating in the country.Subscribe to our daily newsletter