Samsung closes smartphone factory in Chinese city of Tianjin

Samsung is closing one of its Chinese smartphone factories. The factory is located in the city of Tianjin, on the north coast of China. About 2,600 workers lose their jobs. The factory will close by the end of this year.

According to Reuters, the closure is due to Samsung’s difficulty in competing in China with local manufacturers offering cheaper phones, such as Huawei and Xiaomi. In mid-2013, the South Korean manufacturer still had 15 percent of the smartphone market in China, but now it would be only 1 percent, according to Reuters.

To keep production cheap and efficient, Samsung is increasingly moving it to Vietnam and India. The Tianjin workers whose jobs are being cut will receive compensation and the option of transferring to another Chinese factory, such as the one in the southern city of Huizhou.

The Huizhou plant produces 72 million telephones per year, about twice as much as the Tianjin plant. However, that number is much lower than the combined output of the two factories in Vietnam. They produce 240 million copies annually.