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Aug 18, 2020 / 13:14

Samsung Vietnam refutes rumors of shifting smartphone production to India

All subsidiaries of Samsung in Vietnam are operating normally as the country remain its strategic global production hub.

Samsung has denied rumors that it is planning to shift part of the smartphone production from Vietnam to India, and affirmed that all production facilities in northern Vietnam are operating as normal, according to the Tuoi Tre.

 Vietnam remains Samsung's global production hub. 

The denial was made after the Economic Times, an Indian news website, reported that Samsung is considering shifting a major part of its smartphone production to India from Vietnam and other countries, as the South Korean tech giant hopes to produce devices worth US$40 billion in India.

The move would help Samsung diversify its production lines and taking advantage of the Production Linked Incentive (PLI) scheme from the India government, Economic Times added.

As such, Samsung is reportedly to have submitted plans of making smartphones worth over US$40 billion to the Indian government in the next five years. Out of this, phones with factory price of over US$200 could account for over US$25 billion, with the majority subject to export.

Economic Times cited Indian government officials as saying Samsung’s move would also help plug a major loophole in India’s efforts to find ways to eschew cheap imports from ASEAN countries to India, owing to the Free Trade Agreement the country has with the trading block.

In a meeting with Samsung Vietnam’s CEO Choi Joo Ho on August 11, Vietnam’s Prime Minister Nguyen Xuan Phuc expressed hope that the country would continue to remain Samsung’s global strategic production hub, especially as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU – Vietnam Free Trade Agreement (EVFTA) have become effective.

In early March, Samsung Vietnam started construction its largest R&D center in Southeast Asia in the West of Hanoi with investment capital of US$220 million, a move showcasing Samsung’s long-term commitment to Vietnam.

According to Samsung's statistics, around 50% of Samsung's smartphones and tablets are produced in Vietnam and exported to 128 countries and territories, including the US, Europe, Russia and Southeast Asia.

In the 2008 – 2018 period, Samsung increased its total investment in Vietnam from US$670 million to over US$17.3 billion, a 26-fold increase. 

The global smartphone export market is about US$270 billion. By value, Apple has a 38% market share and Samsung 22%. By volume, Samsung has 20% and Apple 14%.