LG shifts smartphone production from South Korea to Vietnam

Company tries to stem 4 years of red ink by moving production to low-wage country

SEOUL/HO CHI MINH CITY —  will halt smartphone production in South Korea, putting the future of the second-tier smartphone brand in question amid a shrinking market and heated competition from Chinese companies.

The electronics maker known for its latest bendable screen said Thursday it plans to move its high-end smartphone production from a plant in Pyeongtaek, on the outskirts of Seoul, to a factory in Hai Phong, in northern Vietnam. This is aimed at turning around its loss-making smartphone unit.

The Pyeongtaek plant has an annual capacity of 5 million units. The shift will increase the Hai Phong plant’s annual production capacity to the 11 million range.

LG Electronics also makes smartphones in China, India and Brazil.

LG Electronics sold about 40 million smartphones globally in 2018, accounting for nearly 3% of the global market. But the unit has reported quarterly operating losses for nearly four years, through the October-December quarter of 2018.

According to South Korean media reports, shifting smartphone production to Vietnam is expected to improve the unit’s bottom line as the country’s minimum wage is about one-eighth that in South Korea.

About 750 employees at the Pyeongtaek plant will be given jobs at a household appliance factory elsewhere in the country.

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