Monday, March 24, 2008

Samsung to build large mobile phone plant in Vietnam

SamsungSamsung's handset division keeps growing like crazy. Last year they've produced a total of 160 million mobile phones and this year they're shooting for 200 million mark. Half of the mobile phones shipped last year were made in Korea, while other half is built in Samsung's factories in China, Brazil and India. And they keep expanding…

The Korean giant is set to build a new factory in Vietnam that at some point will be able to produce up to 100 million units per annum. The location is already set and reportedly it's the citizens of the Bac Ninh Province which will benefit the most from the new facility. Either later this year or early next year, they'll start with production capacity of 30 million handsets, with a view to raising its annual production capacity to 100 million units.

You would think labor in China is affordable, but apparently Vietnamese are ready to work for half of the money their Chinese counterparts are. In addition, Samsung Vietnam's location is beneficial for the Korean company as it can easily export handset to rapidly growing markets in the region, such as Thailand, Malaysia and Cambodia, at lower tariff rates.

So what can we say except good luck Samsung! Maybe it's a good idea to transfer the production of low-end handsets to other, non-Korean factories, while keeping cream de la cream for the domestic labor. Or you already do so?