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

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 international demand.

The South Korean electronics big 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 according to what business and authorities sources in addition to Samsung (KS:) staff have instructed Reuters that the corporate had just lately lower its smartphone manufacturing in Vietnam for a second time this yr.

It’s unclear if the cuts in Vietnam replicate Samsung’s common drop in manufacturing or a shift to different manufacturing international locations.

Samsung, which has invested round $18 billion in six factories in Vietnam, with at the 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 yr earlier, the Normal Statistics Workplace (GSO) mentioned.

Smartphone output within the first 11 months of the yr 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 yr earlier.

The broader class of shopper electronics manufacturing dropped practically 20% on the yr 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 often rising within the weeks earlier than Christmas. However expectations of decrease shopper demand this yr is pushing companies to restrict manufacturing.

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

SAMSUNG CUTS

Earlier this month, an business supply acquainted with the matter mentioned Samsung “has lower manufacturing considerably” as soon as once more after it scaled again its actions in Vietnam within the first half of the yr amid the coronavirus pandemic.

A Vietnam authorities supply confirmed Samsung lower manufacturing within the nation twice this yr, with the newest transfer more likely to restrict Vietnam’s contribution to the corporate’s international output of smartphones to 40% from the everyday share of fifty%.

Three firm staff 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 yr 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 elements and supplies used for exported merchandise are sometimes imported for meeting in Vietnam.