Samsung Electronics produces the largest number of smartphones in the world. The market has grown so much in these years but still reports suggest that Galaxy sales have been declined due to prolonged smartphone replacement cycle. Samsung Electronics decided that the company would be unable to invest in Vietnam in its smartphone business. Domestic part suppliers which has moved their production basis to Vietnam along with Samsung are also expressing the same vibe.
According to the Samsung Electronics quarterly sales report, the recorded sales was KRW21,188 billion in the third quarter of this year. Sales was 2.9 percent less than it was in the same period last year, while net income fell 29.4 percent. This reverse trend in sales is rare. It is happening since the last Galaxy was released and the trend grew more in the reverse order since then. The average annual growth for three years from 2014 to 2017 was 58%. Net profit was also increased four times.
SEVT is the second smartphone established in Vietnam after Samsung moved its production base from China to Vietnam. The factory is about 182,000 square meter, the largest among all factories of Samsung. Estimated more than 60,000 workers are associated with SEVT.
Samsung is producing about half of Samsung Galaxy smartphone which is around 150 million units from SEV and SEVT. Samsung Electronics Vietnam was established in 2008 in the province of Hanoi. Factory is in sales since the large volume has been transferred to SEVT. SEV’s annual sales have been decreased from 26 trillion to 19 trillion in 2014 and they have been hovered at 18 to 19 trillion every year until last year.
Business analyst suggest that SEVT is experiencing decline due to poor Galaxy business. At the production phase the smartphone replacement cycle has been prolonged which gave Chinese rival smartphone companies an edge in the market. A Samsung Electronics representative said, “Samsung Galaxy shipments have remained in the range of 310 million to 320 million units since 2015, but this year, 290 million units are being reported for the first time in less than 300 million units this year.” “Galaxy’s largest plant, SEVT, One.”