Why Samsung might move smartphone production from China to India
What's the story
Samsung is considering moving its smartphone production from China to India, as per the Economic Times. The step comes as a response to US President Donald Trump's recent move to impose hefty tariffs on Chinese goods. The Trump administration doubled the tariff on Chinese imports, which now stands at 20%. The new levy applies to a host of consumer electronic items, including smartphones, laptops, and wearables.
Strategic shift
Samsung's gradual exit from China
In fact, Samsung started its gradual exit from China as early as 2020. An executive from a leading electronics contract manufacturer hinted that India could see an increase in orders from Samsung, indicating a potential shift in production strategy.
Manufacturing shift
Electronics brands eye India as manufacturing hub
Industry insiders have also revealed that global smartphone brands with a major presence in the US market, are looking to shift some of their production to countries like India. This would be a way to counter the impact of the new tariffs. However, it's worth noting that China still has an edge over other countries with its advanced manufacturing infrastructure and scale.
Production details
Samsung's partnership with Chinese ODMs
A large chunk of Samsung's entry-level handsets are manufactured in partnership with Chinese original design manufacturers (ODMs). They are also manufactured at their overseas manufacturing plants. Omdia executive Jusy Hong said that as Chinese ODMs continue to increase their overseas production bases, particularly in India, the chances of increased production through Indian-based ODM partners is increasing. This hints at a possible shift in Samsung's manufacturing strategy toward India.