Will phone exports bounce back as Samsung’s production in China slows?

Samsung is believed to have great advantages over its rivals as its production base is in Vietnam, not in China, where the Covid-2019 has forced a series of factories to close down.

Reports show the sharp decline in phone exports in the last two consecutive years. The General Statistics Office (GSO) reported that $2.6 billion worth of phones and phone accessories were exported in January, down by 22.4 percent compared with the same period last year.

Will phone exports bounce back as Samsung’s production in China slows?

The export turnover of phones and phone accessories in 2015-2019



The General Department of Customs (GDC) reported the sharper decrease, 36.5 percent in December 2019 compared with November. The export turnover of $2.86 billion in December means a slight decrease compared with the same period of 2018,

The export growth of the products which made the greatest contributions to GDP (25 percent) has been slowing down.

According to GDC, in 2019, the export turnover of phones and phone accessories hit $51.38 billion. This was the first time the export turnover of the products exceeded the $50 billion threshold. The products made up 19.45 percent of total export turnover of Vietnam in 2019.

According to GDC, in 2019, the export turnover of phones and phone accessories hit $51.38 billion. This was the first time the export turnover of the products exceeded the $50 billion threshold. The products made up 19.45 percent of total export turnover of Vietnam in 2019.

However, compared with 2018, the export turnover in 2019 increased by 4.4 percent only, or $2.16 billion. Meanwhile, Vietnam’s total export turnover in 2019 increased more sharply, by 8.4 percent, or $20.49 billion.

 


2019 was the second consecutive year that saw the export turnover of phones and phone accessories growing more slowly than other key export products.

In 2017, phones and accessories led in terms of growth rate ($45.27 billion, up by 31.9 percent over the year before, or $10.95 billion).

In 2018, the export value of the products was $49.08 billion up by 8.4 percent, or $3.81 billion, over 2017. The growth rate was lower than that of textiles and garments ($30.49 billion, up by 16.7 percent, or $4.37 billion).

And in 2019, phones and phone accessories fell to the third position in terms of growth rate. Computer, electronics and electronic component exports increased by $6.36 billion, or 21.5 percent, while textile and garment exports increased by 7.8 percent, or $2.37 billion.

Phones and phone accessories have amounted to over 20 percent of Vietnam’s total export turnover in the last few years.

Samsung remains the biggest exporter. The world’s largest smartphone manufacturer chose Vietnam to set up its production base with two complexes in the north, which provide 50 percent of the manufacturer’s total products sold in the world.

A representative of Samsung Vietnam told the local press that the manufacturer uses electronic components from many countries, including China, but most components are from Vietnam and South Korea.

Samsung halts phone factory due to coronavirus infection

A Samsung mobile factory in South Korea has halted operations due to a coronavirus infection, while its Vietnamese facility is said to work at full capacity.

Samsung has confirmed one case of coronavirus infection at its mobile device factory in the southeastern city of Gumi, South Korea on February 22. The entire facility has been shut down, colleagues placed in self-quarantine, and the worker’s floor shut down until Tuesday.

"The company has placed colleagues who came in contact with the infected employee in self-quarantine and taken steps to have them tested for possible infection," Samsung said in a news release.

Samsung's factory in Gumi accounts for a small portion of its total smartphone production. The facility makes high-end phones, mostly for the domestic market, while the brunt of Samsung's smartphone production takes place in Vietnam and India.

Meanwhile, at the launching ceremony of its latest smartphone (Galaxy S20) in Ho Chi Minh City last week, Samsung said that its Galaxy factories in Vietnam were operating at “full capacity”. The new devices are assembled at factories located in Thai Nguyen and Bac Ninh, both near Hanoi, that together ship half of all Galaxy phones worldwide.

"Samsung Vietnam's operations are in perfect condition," Nguyen Tri Thong, corporate marketing director at local smartphone unit Samsung Vina Electronics, told Nikkei Asian Review on the sidelines of the event. "We are now running at full capacity.”

While Samsung said its operations in Vietnam have returned to normal, there are concerns over logistics at the Chinese border as the Korean company's factories source some parts from China. Earlier this month, hundreds of containers of imported products, including parts and materials for electronics, were held up at Huu Nghi in Lang Son province, one of the three busiest checkpoints on the border. VIR

Kim Chi 

FIEs still dominate Vietnam’s exports

FIEs still dominate Vietnam’s exports

Vietnam’s import and export value has exceeded $400 billion and is moving towards the $500 billion threshold. 

FIEs favored while Vietnamese enterprises at a disadvantage

FIEs favored while Vietnamese enterprises at a disadvantage

The problems caused by FIEs, such as transfer pricing and investment under others’ names, have been noted in the Party Politburo’s Resolution 50 for the first time.

 
 

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