LG to move S. Korean smartphone production to Vietnam

By Dat Nguyen   April 26, 2019 | 09:07 pm PT
LG to move S. Korean smartphone production to Vietnam
LG expects its move to Vietnam will boost smartphone production capacity. Photo by Reuters/Sergio Perez
LG Electronics will relocate its South Korean smartphone production to Vietnam in a bid to cut losses.

The South Korean company said in a recent statement that the move will boost annual production capacity of its smartphone plant in Vietnam by 83 percent to 11 million handsets from the second half of this year.

LG will phase out its Pyeongtaek factory, located south of Seoul, and shift the production line to Vietnam’s northern coastal city of Hai Phong, where other LG affiliates operate factories, South Korean news agency Yonhap reported.

The company currently manufactures smartphones in South Korea, Vietnam, Brazil and China. Its mobile division has been posting losses since the second quarter of 2017.

LG’s announcement came after its rival Samsung Electronics earlier this year said it was committed to a long-term presence in Vietnam as a major base for its global operations.

Samsung last year closed one of its two factories in China to focus more on low-cost countries like Vietnam and India for production. Its two phone factories in Vietnam produce half of all the cellphones that Samsung supplies to the global market.

South Korea was the second largest foreign investor in Vietnam last year, accounting for 20.3 percent of total registered FDI in Vietnam, behind Japan at 24.2 percent.

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