Vietnam smartphone exports fall forward of Christmas as Samsung cuts output By Reuters

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© Reuters. FILE PHOTO: Workers make their method 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 response to official knowledge, 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 practically a fifth of the nation’s total exports.

The autumn in output is consistent with what trade and authorities sources in addition to Samsung (KS:) workers have instructed Reuters that the corporate had just lately minimize its smartphone manufacturing in Vietnam for a second time this 12 months.

It’s unclear if the cuts in Vietnam replicate Samsung’s normal drop in manufacturing or a shift to different manufacturing nations.

Samsung, which has invested round $18 billion in six factories in Vietnam, with at the very least 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 12 months earlier, the Common Statistics Workplace (GSO) mentioned.

Smartphone output within the first 11 months of the 12 months fell 6.1%. The GSO additionally mentioned the worth of Vietnam’s smartphone exports in November fell 1% on the month and 0.7% from a 12 months earlier.

The broader class of shopper electronics manufacturing dropped practically 20% on the 12 months in November, GSO knowledge 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 normally growing within the weeks earlier than Christmas. However expectations of decrease shopper demand this 12 months is pushing companies to restrict manufacturing.

Nevertheless, if demand stays sustained, the manufacturing cuts might exacerbate inflation in Europe and different importing areas.

SAMSUNG CUTS

Earlier this month, an trade supply conversant in the matter mentioned Samsung “has minimize manufacturing considerably” as soon as once more after it scaled again its actions in Vietnam within the first half of the 12 months amid the coronavirus pandemic.

A Vietnam authorities supply confirmed Samsung minimize manufacturing within the nation twice this 12 months, with the most recent transfer prone to restrict Vietnam’s contribution to the corporate’s world output of smartphones to 40% from the standard share of fifty%.

Three firm workers in Vietnam confirmed the cuts, with one noting employees had been allowed to take seasonal leaves regardless of the approaching Christmas, in distinction with earlier years.

Because the nation faces headwinds from a worldwide slowdown, its total exports in November fell 8.4% from a 12 months earlier to $29.18 billion, in response to the GSO.

Imports additionally fell by 7.3%, signalling potential additional manufacturing cuts as a result of parts and supplies used for exported merchandise are sometimes imported for meeting in Vietnam.

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