Korean market has been one of the leading in production of smartphones, thanks to home grown companies like Samsung and LG. However, it now seems that the once-bustling smartphone plans for productions are now about to fade out.
Both smartphone brands from South Korea — Samsung Electronics and LG Electronics are either shutting down their production lines in the home market or are curtailing domestic output, as per the report from industry analysts.
Nowadays, companies are moving their productions to third-world countries where the production cost is lower because of lower labor costs. This is important as the competition with Chinese smartphone makers such as Huawei and Xiaomi have made the smartphone market price competitive.
Going by the developments, it is being speculated that the smartphone production in South Korea could soon come down to zero. According to a report from Strategy Analytics, smartphones produced in Korea accounted for 11.4 percent of the total shipped in the global market in 2008, but the figure fell sharply to 1.3 percent in 2018.
The Korean production of smartphones is expected to fall further following LG Electronics’ decision to phase out work at its Pyeongtaek factory in Gyeonggi Province by the end of the year. It will now shift production to Hai Phong in Vietnam where the firm has operated a factory since 2014.
On the other hand, Samsung Electronics is also scaling down its output in Korea. The company produced about 60 million smartphones annually in Korea a decade ago, but is currently producing about 20 million. Samsung, which operates factories in Vietnam, Brazil, India and Indonesia, produces about 300 million devices a year in total.
As per the recent figures, Samsung produces almost half of its entire smartphones in Vietnam. The company is also planning to build additional factories in India, seeking to increase smartphone production.