VietnamSmartphone production and exports fell in November ahead of the holiday season, according to official figures, a fresh sign for the country’s largest manufacturer. Samsung electronicsadapts to dwindling global demand.
The South Korean electronics giant has been producing about half of its own for years smart phone in Vietnam and accounts for almost a fifth of the country’s total exports.
The drop in production is consistent with what industry and government sources are as well Samsung Employees have said that the company recently halted its smartphone production in Vietnam for the second time this year.
It’s unclear whether the cuts in Vietnam reflect Samsung’s overall production decline or a shift to other manufacturing countries.
Samsung, which has invested around $18 billion in six factories in Vietnam, at least two of which focus on smartphones, declined to comment.
The Southeast Asian country, a regional manufacturing powerhouse, reported a 9.3 percent year-on-year decline in smartphone production to 20.6 million units in November General Statistical Office (GSO) said.
Smartphone production fell by 6.1 percent in the first 11 months of the year. The GSO also said the value of Vietnam’s smartphone exports fell 1 percent mom and 0.7 percent year-on-year in November.
The broader consumer electronics manufacturing category fell nearly 20 percent in November from a year earlier, GSO data showed, with monthly output falling for a third straight month.
Most smartphones produced in the country are destined for Western markets, with production typically ramping up in the weeks leading up to Christmas. But expectations of lower consumer demand this year are forcing companies to limit production.
However, if demand holds up, the output cuts could exacerbate inflation Europe and other import regions.
Earlier this month, an industry source familiar with the matter said Samsung had “cut back production significantly yet again” after scaling back its operations in Vietnam in the first half of the year amid the coronavirus pandemic.
A Vietnamese government source confirmed that Samsung has reduced production in the country twice this year, with the latest move likely to limit Vietnam’s share of the company’s global smartphone production to 40 percent from the typical 50 percent share.
Three employees at the company in Vietnam confirmed the cuts, with one noting that despite the approaching Christmas, workers have been allowed to take seasonal leave, unlike previous years.
As the country faces headwinds from a global slowdown, its total exports fell 8.4 percent year on year to $29.18 billion in November, according to the GSO.
Imports also fell 7.3 percent, suggesting possible further production cuts as components and materials used in exported products are often imported for assembly in Vietnam.