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South Korean cellphone maker Samsung plans to revise its smartphone production strategy and could shift some of its production capacity to India and Indonesia by investing $ 140 million in total, according to a press report .

He said Samsung would increase its manufacturing capacity at its plant in India to 93 million units per year by 2022, from 60 million units per year currently, at a cost of $ 90 million. Its plant in Indonesia will increase its capacity to 18 million units per year during the same period, with an investment of $ 50 million, according to the report.

Expansion in India and Indonesia will come at the expense of reduced capacity in Vietnam, where the brand has two factories – one in Bac Ninh province (called SEV) and Thai Nguyen province (called SEVT) .

Samsung currently has the capacity to manufacture 182 million units of smartphones per year at its Vietnamese factories, accounting for 61% of its total production in 2020, according to the report.

Once the restructuring is complete, Vietnam will account for 50% of Samsung’s smartphone production, followed by India (29%) and Indonesia (6%).

According to sources cited by the publication, Samsung is taking these measures due to rising labor costs in Vietnam and also due to the Covid-19 cases which have forced the brand to close its facilities in the country. . He also wants to reduce his dependence on Vietnam.

The South Korean company was also the first company to meet its production targets under India’s Rs 41,000 crore production incentive program (PLI) for local handset manufacturing, and it chose 2020-21 as the first year to benefit from the 6% incentive. .

In a report, IDC said the fourth quarter will see a decline in smartphone sales in the country due to current supply chain challenges, resulting in annual shipments of less than 160 million in 2021 from 150 million in 2020. According to Counterpoint Research, annual smartphone shipments in 2021 are expected to reach 168 million, up from 152 million in 2020. CMR, for its part, estimates a 5-8% year-over-year growth in smartphone shipments this year.

Samsung shipped 69.4 million units to India for a 21% market share in the September quarter, behind market leader Xiaomi, according to research firm Canalys. latest regulatory filings. Its operating income grew 0.5% year-on-year to Rs 75,886 crore, according to statements filed with the companies registrar and accessible through the Tofler business intelligence platform.

Samsung’s mobile phone business is also much larger than sales by India’s largest consumer packaged goods company Hindustan Unilever or conglomerate ITC Ltd. Samsung’s mobile phone business grew 6% year-on-year in 2020-2021 to Rs.55,397 crore, with its contribution to total sales reaching 73%, a jump of three percentage points from the previous year. Previous exercice.

However, the pace of growth in mobile phone business slowed for Samsung last year, after posting growth of 21% in 2019-20 and 15% in 2018-19.

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