Samsung Electronics Likely to Reduce TV Production in China

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Samsung’s share in the Chinese TV market is said to have declined after the Beijing government ended the subsidy programme for energy-efficient home appliance purchases in 2013

 Owing to deteriorating sales conditions and rising labour cost, Samsung Electronics Co. is reportedly planning to move part of its TV production out of China.

Sources from the business circle told Pulse, a South Korean news website, on Monday that the tech giant is reviewing a plan to reduce TV production at Tianjin Samsung Electronics in northern China.

Meanwhile, a rumour is making the rounds that the company has already started cutting the production from the factory as sales slumped in the country.

Launched in 1996, Tianjin Samsung Electronics manufactures LCD TV, monitors and display modules. It is Samsung’s only TV factory in China with more than 90 percent produced for the local Chinese market and the rest for exports.

Declining sales and rising labour cost

According to a news report, Samsung’s share in the Chinese TV market has declined after the Beijing government ended the subsidy programme for energy-efficient home appliance purchases in 2013 and instead chose to pick companies to give supports.

In addition, the rising labour cost in China has been pushing up the company’s production cost.

When inquired by Pulse, a Samsung Electronics official said that the company is mulling various measures to boost TV production efficiency, but it is yet to make its final decision.

Efforts are being made by the company to restructure production lines of not only TVs but also other products to make them more cost-effective.

Earlier this month, the company announced a plan of shutting down a mobile phone manufacturing plant in Tianjin, China by the end of this month.

In July, it converted TV production lines in Suwon, Korea to make only those for pilot tests. It is also reported that the company is considering shifting TV production to Vietnam from Chennai, India.

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