Samsung Slows Production at Large Smartphone Plant in Vietnam: Report

Samsung is cutting back production at its largest smartphone plants, located in Vietnam, as retailers struggle to sell through existing inventory and orders slow down — reports Reuters.

According to Samsung employees in Vietnam’s northern province of Thai Nguyen, which accounts for half of the company’s global phone production volume, assembly lines are going from operating six days per week to three or four.

“We are going to work just three days per week, some lines are adjusting to a four-day workweek instead of six before, and of course no overtime is needed,” one 28-year-old worker at the Thai Nguyen plant said.

“Business activities were even more robust during this time last year when the COVID-19 outbreak was at its peak. It’s so tepid now.”

Samsung shipped 270 million smartphones last year and originally planned to produce 310 million in 2022. Back in May, the company revised its 2022 smartphone production forecast to 280 million units. That said, Samsung told Reuters that it does not plan on reducing its annual production target for Vietnam.

“Of course there is a low season every year, often around June-July, but low means no OT (overtime), not workday cuts like this,” the plant worker added.

While smartphone demand is widely expected to drop as part of a wider economic slowdown across the globe, the world’s largest smartphone maker said on its earnings call last week that it sees demand either staying flat or even managing single-digit growth.

Samsung believes sales of its foldable flagships will exceed those of the now-discontinued Galaxy Note in the second half of the year. The company will unveil its latest foldable devices, the Galaxy Z Flip 4 and Z Fold 4, at its upcoming Galaxy Unpacked event on August 10.

Employees at Samsung’s Vietnamese smartphone factories are seeing their paychecks shrink as the company slashes production. Some workers are even worried about job cuts, although none have been announced so far.

Vietnam could experience a notable economic impact if the lull in production lasts, given that Samsung accounts for 20% of the country’s total exports.

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