China falls out of favor with Samsung; high labor costs cited

03/19/2013

Samsung Electronics' largest global plant for manufacturing its Galaxy range of mobile phones and tablets is now the facility in Hanoi, Vietnam, according to sources interviewed at the recent Koplas show in Seoul, Korea (March 12-15). Production has reportedly been gradually transferred out of China due to high labor costs. In fact, the top two plants for the company are located outside of China in Vietnam and South Korea. The Tianjin, China, plant is now one of the company's smallest. Some observers estimate that the Hanoi plant may be turning out as much as two-thirds of the company's overall output of mobile devices, with further expansions planned for the plant.

This is further proof that global electronics OEMs are looking beyond China to manufacture goods for the global markets that they serve. Mexico could also well become a beneficiary of this trend.

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