[News] Samsung Considers Shifting Smartphone Production Away from China Amid U.S. Tariff Pressure

According to a report from ijiwei, citing Pune News, Samsung Electronics is assessing the potential impact of Trump’s tariff policies on its supply chain. The report indicates that the tech giant is reportedly considering options to relocate its smartphone manufacturing operations out of China.

As noted by the report, citing sources, Samsung is actively seeking new Joint Design Manufacturing (JDM) partners outside of China, though this JDM relocation plan is still in the early planning stages, and no final decision has been made yet.

The report mentions that the U.S. recently imposed a 10% tariff on Chinese imports. Citing sources, the report indicates that if these tariff conditions persist, prices of smartphones produced in China may rise, which could, in turn, impact sales.

Notably, the report points out that while Vietnam has traditionally been an alternative manufacturing hub, it also faces potential tariff risks. Therefore, the report highlights that India is considered a more viable option to meet Samsung’s production needs.

As stated in the report, JDM represents a collaborative form of contract manufacturing, where both the ordering company and the manufacturer participate in product development. Currently, Samsung produces its high-end devices, including the Galaxy S series and foldable smartphones, in-house while leveraging JDM partnerships to manufacture mid-range and budget smartphones targeted at emerging markets, as the report notes.

Citing sources, the report indicates that devices produced through JDM partnerships account for approximately 20% of Samsung’s annual smartphone sales, underscoring the significant scale of this potential manufacturing shift.

The report from ijiwei points out that major Chinese companies such as Wingtech, Huaqin, and Longcheer are currently Samsung’s primary JDM partners.

Samsung’s Memory Business Under Pressure from Trump’s Tariff Plan

Aside from smartphone manufacturing, Trump’s proposed tariff plan is adding pressure to South Korea’s memory chip industry. According to a report from The Chosun Daily, the Trump administration aims to impose tariffs exceeding 25% on semiconductors, directly impacting key players like Samsung Electronics and SK Hynix, which are heavily dependent on memory chip manufacturing.

The report from The Chosun Daily highlights that to bypass these tariffs, companies would need to shift semiconductor production to the U.S. However, Samsung’s existing facility in Austin and its upcoming plant in Taylor, Texas, are focused on foundry operations rather than memory chip production, limiting their ability to mitigate the tariff impact.

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(Photo credit: Samsung)