Samsung set to end production at its last PC-making factory in China

Set against a backdrop of ongoing tensions between the US and China, a saturated smartphone market and the global economic downturn in the wake of the COVID-19 pandemic, Samsung has told staff at its last remaining PC making factory in China that it will be winding down operations. Half of its 1,700 employees will be affected immediately, with the remainder to exist once the shutdown is complete.

The move reduces Samsung’s exposure in China and follows the closure of its last smartphone factory in China in 2019. When Samsung Electronics Suzhou Computer finally ceases operations in the coming months, it will leave just two Samsung factories continuing to operate in China. Both are chip fabrication plants, one based in Suzhou and the other in Xi’an. “China remains an important market for Samsung and we will continue to provide superior products and services for Chinese consumers,” the company said in a statement to Reuters.

At the peak of its operations in 2012, the Suzhou PC making facility had an annual turnover in excess of US$4 billion. In 2018, its turnover had shrunk to just US$1 billion. Samsung’s smartphone sales have also been in decline in China as home grown heavyweights like Huaweui have cut into its sales. Still, Chinese labor costs have risen in recent years and it is, of course, the hotspot where COVID-19 originated,  Samsung one of several major companies to withdraw operations from mainland China with overall conditions in other countries proving more favorable.