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Samsung to add US$3 bln in Vietnamese line

2014/11/10 17:26

SEOUL, Nov. 10 (Yonhap) -- South Korea's tech giant Samsung Electronics Co. said Monday the Vietnamese government approved a US$3 billion expansion of its handset-manufacturing facilities there.

Samsung said it will extend the manufacturing line in Vietnam's northern region of Thai Nguyen, which went into operation in March with an annual production capacity of 120 million units. The world's No. 1 maker of smartphones already has injected $2.1 billion into the facilities.

When completed, the size of the Thai Nguyen production line will be bigger than that of Bac Ninh, another Samsung Electronics' key manufacturing base located just north of Hanoi.

The move apparently reflects the company's urgency in having to revitalize its smartphone business, fast losing its profits on competition from rivals, industry watchers said.

Samsung smartphones have been losing ground around the globe, squeezed by Apple Inc.'s high-end iPhone 6 and cheaper products made by Chinese players. The operating profit in the IT mobile sector crashed to 1.75 trillion won (US$1.61 billion) in the third quarter from 6.7 trillion won a year ago.

South Korea's largest conglomerate, meanwhile, has been making efforts to tap deeper into Vietnam on the back of the Southeast Asian country's cheap labor and favorable tax benefits compared to home.

Other affiliates, including Samsung Electro-Mechanics Co. and Samsung Display Co., also have been speeding up their efforts to build facilities in Vietnam, with the combined investment by the Samsung clan estimated at $11 billion as of November.

colin@yna.co.kr

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