© Reuters. FILE PHOTO: Staff make their solution to work on the Samsung manufacturing unit in Thai Nguyen province, north of Hanoi, Vietnam October 13, 2016. REUTERS/Kham/File Photograph
By Khanh Vu and Phuong Nguyen
HANOI (Reuters) – Vietnam’s smartphone manufacturing and exports fell in November within the run as much as Christmas gross sales season, in accordance with official information, a brand new signal the nation’s largest producer, Samsung Electronics (OTC:), is adapting to dwindling world demand.
The South Korean electronics large has for years produced about half of its smartphones in Vietnam and accounts for almost a fifth of the nation’s general exports.
The autumn in output is in step with what business and authorities sources in addition to Samsung (KS:) staff have advised Reuters that the corporate had lately lower its smartphone manufacturing in Vietnam for a second time this yr.
It’s unclear if the cuts in Vietnam mirror Samsung’s basic drop in manufacturing or a shift to different manufacturing international locations.
Samsung, which has invested round $18 billion in six factories in Vietnam, with not less than two of them focussed on smartphones, didn’t instantly reply to a request for remark.
The Southeast Asian nation, a regional manufacturing powerhouse, reported a 9.3% decline in smartphone output to twenty.6 million models in November from a yr earlier, the Common Statistics Workplace (GSO) stated.
Smartphone output within the first 11 months of the yr fell 6.1%. The GSO additionally stated the worth of Vietnam’s smartphone exports in November fell 1% on the month and 0.7% from a yr earlier.
The broader class of shopper electronics manufacturing dropped almost 20% on the yr in November, GSO information confirmed, with month-to-month output slipping for the third straight month.
Most smartphones produced within the nation are destined for Western markets, with output often growing within the weeks earlier than Christmas. However expectations of decrease shopper demand this yr is pushing corporations to restrict manufacturing.
Nevertheless, if demand stays sustained, the manufacturing cuts may exacerbate inflation in Europe and different importing areas.
Earlier this month, an business supply conversant in the matter stated Samsung “has lower manufacturing considerably” as soon as once more after it scaled again its actions in Vietnam within the first half of the yr amid the coronavirus pandemic.
A Vietnam authorities supply confirmed Samsung lower manufacturing within the nation twice this yr, with the most recent transfer prone to restrict Vietnam’s contribution to the corporate’s world output of smartphones to 40% from the everyday share of fifty%.
Three firm staff in Vietnam confirmed the cuts, with one noting staff had been allowed to take seasonal leaves regardless of the approaching Christmas, in distinction with earlier years.
Because the nation faces headwinds from a world slowdown, its general exports in November fell 8.4% from a yr earlier to $29.18 billion, in accordance with the GSO.
Imports additionally fell by 7.3%, signalling attainable additional manufacturing cuts as a result of elements and supplies used for exported merchandise are sometimes imported for meeting in Vietnam.