LG Electronics Will Close Its Phone Plant In South Korea To Shift Production To Vietnam

On April 25, LG Electronics Inc stated that its smartphones would no longer be manufactured in South Korea. Instead of that, the company has decided to move production to Vietnam to reorganize production to compete with international rivals in the risk of their global demand’s decrease.

In the past, LG was always on the list of the three biggest mobile phone manufacturers in the world. However, in the recent 10 years, the company has witnessed its market share to gradually increase to only nearly 3 per cent – a rather little percentage, especially when smartphones have dominated the global mobile market.

According to John Park, an analyst from Daishin Securities,

While Samsung Electronics Co Ltd and Apple Inc are the most outstanding brands in the United States’ smartphone market, LG which occupied a share of 17 per cent in the Quarter 3 2018 is holding the third position. The market research firm Counterpoint was the one to provide the data.

Many years after losing money on smartphone business, LG hoped that moving production to a new market like Vietnam would help the company to increase the smartphone plant’s capacity each year to 11 million devices by 83% in the last six months of 2019.

According to the company, Vietnam is said to own an “abundant labour force.” Also, 750 employees at the handset plant in South Korean would be dispatched to a new department – LG’s home application plant.

In addition to South Korean, the company has produced smartphones in India, Brazil, and China. Before LG made its decision, Samsung, in the late months of 2018, revealed that the biggest handset manufacturer in the world would shut down one of many mobile phone factories in China.

Another tech company is also planning to close its smartphone plant in Beijing, China. That is Sony Corp from Japan. The company made such a decision after a lot of efforts to make a profit from its dropping handset business.

Back to LG Electronics, its share reached 3 per cent, down 0.2 per cent in the wider market.