The geopolitical crisis has triggered great changes in the market, and Samsung may not be able to take advantage of the “fishing ground”

On the first day of August, South Korean electronics giant Samsung Electronics announced the closure of its last computer manufacturing plant in Suzhou, China. Samsung’s Suzhou Industrial Park has about 1700 employees. In addition to the R & D staff, about half of the contract staff may be laid off in the restructuring, according to Bloomberg.

Samsung Suzhou said in the related instructions to employees that due to fierce competition, the company’s product market share has been shrinking. In response to the changes in the situation and market, Samsung headquarters has adjusted its development strategy and carried out transformation and upgrading of the computer industry. In the future, it will focus on research and development, so as to seek new competitive advantages for Samsung’s computer industry in the future international competition.

after closing its last smartphone manufacturing plant in Huizhou in 2019, Samsung only has two semiconductor manufacturing bases in China, Suzhou and Xi’an.

Nicole Peng, global vice president of canalys mobile business, a research company in the field of smart phones, said in an interview with time finance on August 4 that Samsung was not a major player in PC business, while Samsung’s mobile phone business in China had fallen to the seventh place as early as 2017, and its market share in China is less than 1%. In addition, in the semiconductor business, Samsung hopes to be an upstream supplier in China, rather than compete with other enterprises in hardware.

“of course, generally, no manufacturer will give up the Chinese market easily, but Samsung has not found its own differentiation advantage and sense of existence in the Chinese market, and Huawei is still a strong competitor in the high-end line.” Nicole Peng analyzed.

for a long time, Samsung’s high-end product line has focused on the North American market, while the low-end products have been put into the Indian market. Nicole Peng believes that in terms of return on investment, Samsung needs to spend a lot of effort in China to regain a considerable market share.

according to the data of counterpoint research, an industry analysis company, Samsung’s mobile phone has leapt to the second place in India’s smartphone market with 26% market share, with a month on month increase of 10% to 16%, and the gap with the first Xiaomi has narrowed to 3%.

the market share of Chinese brands has declined from 81% in the first quarter of 2020 to 72% in the second quarter of 2020, mainly due to India’s “sentiment”, which leads to the need for additional review of Chinese imports, the delay in delivery time, and the ban of more than 50 mobile applications from China by the Indian government.

it is against this background that Samsung takes advantage of the situation to increase the size of India’s low-end smartphone market. Upasana Joshi, an associate researcher in charge of client devices of IDC India, told Time Finance on August 4 that in order to compete for more than 80% of the Indian market share from Chinese mobile phone brands, Samsung has launched the galaxy M series with more cost-effective performance since the beginning of 2019, and has actively explored Online sales channels, with strong sales in the past year.

upasana said that despite Samsung’s good development momentum in the past year, IDC predicted that Samsung’s recent considerable market share due to “sentiment” would be “short-term” and “Indian sentiment will soon return to normal.”

in this regard, shilpi Jain summed up the reasons in the second quarter report: “Chinese mobile phone brands in India’s local manufacturing, R & D operations, product cost performance, and strong sales channels leave consumers with little possibility to choose other brands.”

in terms of localization, Nicole mentioned that Chinese mobile phone manufacturers have done a lot of localization work in India, including organizing the production of local personnel, leaving the service and content to Indian companies. Therefore, she also believes that the exclusion of Indian consumers can be appeased in the future.

However, it is worth noting that the Indian government still intends to “block” Chinese enterprises secretly. According to the list of production related incentive plans released by India’s Ministry of electronics and information technology on August 1, 22 mobile phone manufacturers that have passed the application include Samsung and Apple’s assembly partners, but there are no Chinese mobile phone manufacturers such as Xiaomi and oppo.

it is understood that PLI program is a US $6.6 billion manufacturing incentive plan. The Indian government plans to provide 6% financial subsidies for participating enterprises in the plan in the next five years.

Nicole Peng revealed that the Indian government did not intend to apply to Chinese manufacturers for this plan, so “it is a very important opportunity for Samsung.”

“of course, if it is a geopolitical risk, Chinese manufacturers will be more difficult to cope with. Because geopolitics is often a long-term game, mobile phone manufacturers have to take into account the development in other markets before they can hedge risks. ” She said.

TSMC disclosed at the revenue conference in mid July that due to the U.S. government’s ban on Huawei, TSMC has not accepted orders from Huawei since May 15, and if the U.S. government’s sanctions against Huawei remain unchanged, the company will stop supplying Huawei after September 14. It can be seen that TSMC’s supply interruption on chip orders will lay a hidden danger for Huawei’s mobile phone business.

later, foreign media reported that Huawei may seek cooperation from Samsung, which has the second largest chip market share. However, a report in South Korea’s central daily in mid June quoted industry sources as saying that Samsung had rejected an order to make smartphone program processing chips for Huawei.

in this regard, he Hui, an analyst at omdia, a market research company, said in an interview with time finance on August 4 that chip foundry is the most upstream technology. If TSMC can’t do it, then Samsung can’t either.

it is worth mentioning that Samsung’s R & D strength can not be underestimated. At present, Samsung ranks second in 5g patent application, after Huawei.

a week before the UK announced that it would stop using Huawei equipment in 5g construction, Samsung executive vice president Jin Yujun went to Europe to visit local operators. When asked by the British Parliament Committee whether it could provide a new 5g network in the UK, he gave a positive answer and said that Samsung would bring its products with it whenever there was a chance.

subsequently, in a report released on August 3, the Market Research Institute Jibang consulting predicted that the market share of Samsung’s global base station business will increase from 6.5% in 2019 to 8.5%.

in terms of base station business, Samsung is also ranked ahead of Samsung by two old European equipment manufacturers Ericsson and Nokia. They are also closely watching Huawei’s current restricted opportunities.

in semiconductor business, South Korea is also subject to Japan’s export control of hydrogen fluoride and other raw materials. Although South Korea has appealed several times to the World Trade Organization (WTO), one year later, the antagonism between Japan and South Korea still shows no obvious signs of easing.

even in the proud mobile phone business, Samsung may suffer the “black swan” incident. According to the statistics of several market research institutions, in the second quarter of 2020, Huawei’s global smartphone shipment has surpassed Samsung, which has dominated for many years, and won the first championship.

“a year ago, very few people would have predicted such a result. If it had not been for the new outbreak, such a result would hardly have happened.” Ben Stanton, a senior analyst at canalys, said that Samsung’s core markets were damaged by the outbreak of the new crown pandemic and the subsequent blockade. As the main market is in China, Huawei has made full use of the economic recovery opportunities in China to accelerate the development of its smartphone business.

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