Samsung Electronics has initiated plans to end production of its personal computers in China as the firm looks to shift production to Vietnam in an effort to cut costs and remain competitive within the PC market, according to Nikkei Asian Review.

Samsung plant in Suzhou  

The business publication adds that Samsung’s plant in the Chinese city of Suzhou is scheduled to close this month before part of the facility is converted into a research and development centre, with the enterprise informing employees of the closure and job cuts at the end of July.

The article by Nikkei Asian Review outlines how the Korean tech giant has its sights on shifting production to an existing factory within the nation, with a Samsung representative stressing that the shutdown of the Chinese plant is based on the need to rebalance finances.

Samsung Electronics Suzhou Computer, the unit that runs the Chinese plant, was originally established in 2002 as a PC assembly centre, with the majority of computers made at the factory being sold in the Republic of Korea, North America, and China.

According to Korean media, Suzhou Computer previously employed 6,500 people, with that number since shrinking to 1,700. 

Moreover, Nikkei Asian Review quote statistics compiled by research firm Gartner which indicates that Global PC shipments enjoyed a slight rise of 0.6% last year to 261.23 million units. Indeed, Lenovo Group of China holds the top share at 24.1%, while rivals HP of the United States rank second at 22.2%.

At present, Samsung’s market share appears to be in the single digits, below that of US rivals Dell and Apple, in addition to Taiwan's Acer and Asus.

In terms of general-use PCs built with common parts, market share can be directly linked to earnings, according to Nikkei. Moving forward, Samsung will continue to produce PCs, although the company is being forced to cut labour and other costs by relocating production.

“Samsung once operated three smartphone factories in China, but the group shut down all Chinese production at the end of 2019. The capacity has been transferred to Samsung's Vietnamese facilities or delegated to contract manufacturers”, the article states.