Production Bases Moved to Overseas
This year's cellular phone production in Korea has sharply dropped to one sixth of what it was 10 years ago.
Market research firm Strategy Analytics (SA) said on October 23 that the total number of cellphones produced in Korea this year is estimated to be 25 million units, which is only 18.4% of the 136 million units in 2008. Moreover, the share of domestic production in the global total dropped from 11.4% to 1.3%.
On the other hand, mobile phone production in other Asian countries, such as China, India and Vietnam, increased significantly. China, which produced 622 million units in 2008, is estimated to produce 1.372 billion units this year, which account for 70% of the global production. In addition, India's production volume jumped from 60 million units in 2008 to 264 million units this year, accounting for 13.6% the global output. Vietnam, which had no mobile phone production until 2013, is planning to produce 188 million units (9.7%) this year. South Korea ranked fifth after Brazil (27 million units).
The production volume of countries that used to produce tens of millions of mobile phones 10 years ago, including Germany (27 million), Finland (94 million), Japan (33 million), Taiwan (30 million), Brazil (66 million), Mexico (42 million), and Hungary (43 million), has greatly decreased. In particular, Germany, Finland and Hungary produced less than 100,000 units, while Japan, Taiwan, and Mexico barely produced 9, 3, and 4 million, respectively.
This is because the smartphone makers moved their production bases to China, India, and Vietnam for cost reasons. At present, Apple has iPhones assembled in China with some low-cost iPhones manufactured in India. Samsung Electronics also produces half of its mobile phones in Vietnam, and has completed the world's largest smartphone plant in Noida, India, to go for the Indian market, which is the world's second largest smartphone market by volume. The company is also reviewing the shutdown of the Tianjin plant in China to discuss the original development manufacturing (ODM) method.
In addition, LG Electronics is planning to manufacture around 15% of its total production in Korea and the rest in Vietnam and Brazil. In addition, Chinese companies, including Huawei, Xiaomi and Oppo, have been domestically producing smartphones, while increasing production in India. Strategy Analytics said, "The world's mobile phone production is concentrated in China and Vietnam. Production in India is also soaring due to government subsidies and tax benefits."