Samsung's strategic expansion of its global manufacturing footprint in 2023 underscores its commitment to diversifying production, mitigating risks, and bolstering its regional market presence. By increasing production diversification, Samsung aims to enhance flexibility and cost-efficiency, with India, Brazil, Argentina, and Pakistan emerging as key hubs in this strategy, according to DIGITIMES Research.
DIGITIMES Research analyst Yen Chou reports that in 2023, Samsung expanded its global manufacturing footprint. In addition to traditional production bases like India and Vietnam, Samsung has been developing manufacturing ecosystems in Brazil, Argentina, and Pakistan.
These efforts are expected to diversify Samsung's production base, minimize risks associated with supply chain disruptions, and strengthen its position in regional markets. This diversification of manufacturing operations allows Samsung to reduce its dependency on any single location while increasing flexibility and cost-efficiency in production.
India, along with Vietnam, continues to be a major hub in Samsung's mobile phone manufacturing strategy, thanks to the manufacturing facility located in Greater Noida, Uttar Pradesh. The company is ramping up production across a broad spectrum of devices, from entry-level to premium models.
Chou noted that India has become an export hub for high-end models like the Galaxy S24 Plus, which are now being shipped to European markets. This shift aligns with Samsung's broader goal of leveraging local production to quickly meet regional demands while cutting down on costs related to international logistics.
Samsung's Brazilian operations have experienced substantial growth, with the local supply chain now supporting the production of mid-range to high-end devices, including the Galaxy Z Flip5 5G. Furthermore, Chou reported that Brazil has begun local manufacturing of accessories such as charging cables and manuals for the Galaxy S23 FE, further deepening the country's integration into Samsung's global supply chain.
In Pakistan, Samsung has been outsourcing smartphone assembly to Lucky Motor, a local electronics manufacturing services (EMS) provider, since 2021, including the assembly of the Galaxy S23 FE 5G. However, despite these advancements, Chou noted that Pakistan's local supply chain remains underdeveloped, with components such as charging cables and power adapters still being imported from Vietnam.
Phone Arena reports that in 2023, around 21 million mobile phones were produced domestically in Pakistan, with local and Chinese brands leading the charge, while 1.7 million units were imported, according to the Pakistan Telecommunication Authority. The country offers incentives to mobile phone manufacturers to encourage local production.
Similarly, Samsung's manufacturing operations in Argentina have expanded with the help of a local EMS provider. Early models like the Galaxy A22 4G and Galaxy A53 5G were among the first to be assembled locally. The company has since increased its capabilities to assemble devices such as the Galaxy Z Flip5 5G. However, like Pakistan, Chou indicated that Argentina's supply chain is still evolving, relying on imported accessories from Vietnam to complement the assembly process.
Samsung's diversification of its global manufacturing network serves as a strategic response to geopolitical uncertainties and the growing demand for region-specific products. By expanding in emerging markets, Samsung is better positioned to cater to local preferences while ensuring a more resilient and adaptive supply chain across its key regions.
Samung mobile phone production update | |
Country | Features |
India | Full range of low, mid, and high-end models, with increasing production capacity |
Brazil | Maturing local manufacturing supply chain, increased production. Expanded product line to include mid-range and high-end models, such as Galaxy Z Flip5 5G |
Argentina | Outsourced assembly to local EMS providers, primarily for mid-range and low-end models. Relies on imported accessories, supply chain still incomplete |
Pakistan | Lucky Motor handles assembly, increased production capacity. Primarily produces mid-range models, relies on imported accessories |
Source: DIGITIMES Research, September 2024
About the analyst
Yen Chou received a master's degree from the Graduate Program for Political Economy at National Cheng Kung University. He worked as an assistant researcher at the Institute for Physical Planning and Information and as an analyst at DIGITIMES Research. His research focuses on Samsung's global investment and operation, the electronics industry in Vietnam, and the display industry in South Korea.
Credit: DIGITIMES Research
