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Samsung shifts PC production to China

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Samsung is shifting most of its PC production to China. The electronics giant will retain manufacture for its domestic market in Korea, but is shifting the rest to China.

Samsung currently averages a production run of 90,000 PC units a month with plants in Korea, China and other operations overseas. Current capacity is 3 million units a year, but the China plant alone can pump out almost all of today's requirements - it can handle one million units.

A company spokesman told Reuters that it was making the move to control costs and to compete better with the likes of Dell and HP.

Samsung today also announced that it is to combine its optical disk drive-making operations with those of Toshiba. Samsung will be the junior partner in the JV, taking 49 per cent of the equity, against Tosh's 51 per cent. Pro forma annual group sales of DVD and CD drives are 200 billion yen (approx. $1.783bn). In a statement the companies explained the rationale for huddling together.

The optical-disk-drive business faces fast changing customer requirements for faster, slimmer drives, and a rapid transition in the main product to recordable DVD drives. Price erosion and alliances are also making themselves felt and further intensifying competition. In this environment, advantages in technology, product development and price competitiveness are all crucial for survival.

The new joint venture will construct a competitive business structure that can promote optimized use of management resources and leadership in the global market. ®

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