LG moves phone production to Vietnam, shuts down South Korea factory

Lg Moves Phone Production To Vietnam, Shuts Down South Korea Factory

South Korean electronics maker LG Electronics said on April 25 it would move its smartphone production from South Korea to Vietnam in an effort to reduce production costs and make the division profitable after several years of losses.

The company said it will cease producing smartphones at its factory in Pyeongtaek on the outskirts of Seoul and shift manufacturing to a factory in Hai Phong in northern Vietnam. All 750 workers at its South Korean handset factory would be relocated to the company’s home appliance plant.

LG expected in a statement that shifting production to Vietnam will boost annual capacity of its smartphone output to 11 million handsets from the second half of 2019. The Pyeongtaek plant had an annual capacity of five million units. Vietnam would provide an “abundant labour force,” the statement went on, noting that the country’s minimum wage was about one-eighth of that in South Korea.

The restructuring of its money-losing business comes as LG, once one of the world’s top three mobile phone makers, has seen its global market share spiraling to less than three per cent in the decade that smartphones came to dominate the mobile market.

LG is following Samsung in making Vietnam its smartphone production hub. The South Korean electronics giant began making smartphones in the northern Vietnamese province of Bac Ninh in 2009 and meanwhile operates eight large phone factories and one research center in the country. Foxconn, Apple’s production partner for the iPhone, is also considering setting up a factory, while Vingroup, Vietnam’s largest listed firm by market value, has built a manufacturing plant in Hai Phong to produce its home-grown smartphone Vsmart at a capacity of five million phones a year in the first stage.

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South Korean electronics maker LG Electronics said on April 25 it would move its smartphone production from South Korea to Vietnam in an effort to reduce production costs and make the division profitable after several years of losses. The company said it will cease producing smartphones at its factory in Pyeongtaek on the outskirts of Seoul and shift manufacturing to a factory in Hai Phong in northern Vietnam. All 750 workers at its South Korean handset factory would be relocated to the company’s home appliance plant. LG expected in a statement that shifting production to Vietnam will boost annual capacity...

Lg Moves Phone Production To Vietnam, Shuts Down South Korea Factory

South Korean electronics maker LG Electronics said on April 25 it would move its smartphone production from South Korea to Vietnam in an effort to reduce production costs and make the division profitable after several years of losses.

The company said it will cease producing smartphones at its factory in Pyeongtaek on the outskirts of Seoul and shift manufacturing to a factory in Hai Phong in northern Vietnam. All 750 workers at its South Korean handset factory would be relocated to the company’s home appliance plant.

LG expected in a statement that shifting production to Vietnam will boost annual capacity of its smartphone output to 11 million handsets from the second half of 2019. The Pyeongtaek plant had an annual capacity of five million units. Vietnam would provide an “abundant labour force,” the statement went on, noting that the country’s minimum wage was about one-eighth of that in South Korea.

The restructuring of its money-losing business comes as LG, once one of the world’s top three mobile phone makers, has seen its global market share spiraling to less than three per cent in the decade that smartphones came to dominate the mobile market.

LG is following Samsung in making Vietnam its smartphone production hub. The South Korean electronics giant began making smartphones in the northern Vietnamese province of Bac Ninh in 2009 and meanwhile operates eight large phone factories and one research center in the country. Foxconn, Apple’s production partner for the iPhone, is also considering setting up a factory, while Vingroup, Vietnam’s largest listed firm by market value, has built a manufacturing plant in Hai Phong to produce its home-grown smartphone Vsmart at a capacity of five million phones a year in the first stage.

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