Samsung may shift production from China

The number of Samsung Electronics employees in China eight years ago climbed to 60,000 but now has dropped to 10,000, according to a Samsung report released on July 6.

The number of employees in South Korea for Samsung has increased by 20% in the past five years due to the growth of semiconductor factories in Korea. 

Analysts say that Korean companies are slowly shifting production bases to Vietnam and India because of additional regulations and discrimination from the Chinese government, while another factor is the increasing unit prices.

What Samsung’s Report Says:

• According to Samsung Electronics’ 2022 Sustainability Report, in Q4 2021, a no. of 17,820 people performed at the firm’s subsidiaries in China. Which saw a decrease of 70. 6% from the high of 63,316 in 2013. 

• The crew in China dropped below 60,000 in 2014, under 50,000 in 2015, and 40,000 in 2016 and 2017 when the THAAD incident broke out. 

What is the THAAD issue? The same month in 2016, the U.S. and South Korea announced the alliance decision to deploy a U.S. Terminal High Altitude Area Defense (THAAD) anti-missile battery in South Korea to defend against the increasing North Korean missile threat.

Following this, the Workforce stoop even further when due to the commerce dispute between the United States and China, i.e. less than 30,000 in 2018 and 2019, and below 20,000 in 2020 and 2021.

During this period, Samsung Electronics pared its factories in China. They were ;

The communications factory in Shenzhen in May 2018 and its smartphone factory in Tianjin in December of the same year suffered the closing.

Factory in Huizhou in 2019 was the last to go, the smartphone production headquarters in China.

Following this, in July 2020, the company also closed its computer manufacturing installations in Suzhou. 

The Future:

Currently, these factories and production facilities have been moved to Vietnam and India, with China having only three facilities at this point.

They are a home appliance factory, a semiconductor back-end processing plant in Suzhou, and a memory semiconductor factory in China. Xi’an.

Samsung has been hit by high tariffs following the US-China trade dispute, policies focused on domestic demand, and rising labour costs. Tariffs are taxes levied on goods or services imported from another country. 

Tariffs are trade obstacles that inflate prices and reduce available quantities of goods and services for the U.S., businesses, and consumers.

The strict blockade policy for the pandemic has hindered Samsung’s stable business in China.

The South Korean tech giant is expected to discontinue acquisitions of the in-home appliance and semiconductor manufacturing leftover facilities in the Dragon’s Den.

Although, this could be seen as a profiteering opportunity for still developing and potential holder countries like the land of tigers, culture & spirituality, India.

Sources & References :

• BK