Thai Nguyen The South Korean technology giant Samsung Electronics is drawing consequences from the recent slowdown in smartphone demand and is scaling back production at its smartphone plant in Vietnam, according to employees.
“We will only work three days a week and overtime is no longer necessary,” said 28-year-old worker Pham Thi Thuong, who has been working at the factory in the northern city of Thai Nguyen for five years and has never experienced anything like this, according to her own statements. Instead of running for six days, some tapes only ran for four days.
One of two Samsung smartphone factories in Vietnam is located in Thai Nguyen, where, according to the company, 100 million devices can be manufactured annually. Last year, Samsung shipped about 270 million smartphones worldwide.
Around half of these were manufactured in Vietnam – a country in which Samsung has invested around 16 billion dollars and where the company is responsible for around a fifth of all exports.
It is unclear whether Samsung will shift production
Samsung is also the reason why the city of Thai Nguyen, located 65 kilometers from the capital Hanoi, has developed into an industrial stronghold and has attracted tens of thousands of young workers. They now fear for their future and their jobs. “My salary was reduced by half last month,” Nguyen Thi Tuoi said.
According to Thuong, there was more going on even during the corona crisis: “Everything is so lukewarm right now.“ Other employees agreed with her opinion. Managers would have justified the measures against them with the full warehouses and weakening orders.
At first, it was not known whether Samsung was moving the production of Thai Nguyen to other plants. The Seoul-based technology group also manufactures in South Korea and India.
Samsung told Reuters that a reduction in annual production in Vietnam was not an issue. Similar to the iPhone company Apple, Samsung is relatively optimistic about smartphone demand in the second half of the year.
When the quarterly report was published last week, Samsung stated that the supply bottlenecks had largely been resolved and that demand was stagnating or even increasing slightly. The South Koreans mainly rely on foldable smartphones.