LG Electronics to Move Korean Smartphone Production to Vietnam

Ruben Fields
April 27, 2019

In order to work around it, the report claims that the company has chose to suspend mobile phone production in South Korea, its home country, and, instead, shift manufacturing to its other plant, in Vietnam.

LG Electronics now manufactures smartphones in South Korea, Vietnam, Brazil and China, with its local factory mainly producing premium devices.

The biggest reason for the production shift is to save costs in a fiercely competitive market where Chinese smartphone brands such as Xiaomi, Oppo and Vivo are increasing their penetration at a formidable speed on affordable prices and technology enhancements.

Citing an unidentified source, Yonhap reported that LG made a decision to move its local handset production to Vietnam to help turn around the money-losing smartphones division.

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It is expected to reduce production in Pyeongtaek from the second half of this year and halt all production within this year. It plans to deploy the remaining manpower to other businesses in South Korea. The company has also reportedly decided not to hire new employees for the mobile business department.

The source claims that the Korean phone maker needs to cut down production costs which makes it very important for its manufacturing plant to move out of South Korea. Vietnamese workers are paid about 206,000 won ($180) a month based on 2019 minimum wage criteria, according to the country's wage committee.

LG's latest premium phone, the G8 ThinQ.

LG's mobile division has seen a tough couple of years - the last few generation of smartphones haven't been very successful for the company, and consequently the division has reportedly making a loss for 10 straight quarters.

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