With manufacturing suspended in China and supply of key components and handset models in jeopardy, Chinese firms are feeling the heat. Though many of them have set up facilities in India, they continue to depend heavily on supplies from China.
Samsung, however, is somewhat immune to supply disruptions in the neighbouring country. This is because the firm, which has been manufacturing most of its handsets locally, ramped up its capacity in 2018 by adding new lines and product categories at its Noida facility, doubling its installed capacity to 120 million units from 68 million a year.
Moreover, unlike its rivals, Samsung has an in-house supply chain of key components like printed circuit board and display panels. And its largest production base is in Vietnam. Navkendar Singh, research director at IDC, said Samsung was less likely to be impacted by the recent crisis.
“Unlike its Chinese rivals, Samsung’s operations are spread across continents. Thus, it has a larger inventory level and its plans are not solely dependent on China or India. Supply crunch from China, thus, may help it during the first quarter here,” he said.
“We not only produce most of our components in India, but also, we have a huge facility in Vietnam. Thus, we are not expecting any major impact on operations because of the coronavirus
crisis,” said a senior executive of Samsung India.
According to the person, the firm is on course to roll out its two new flagships — Samsung Galaxy Z Flip and Samsung Galaxy S20+ — by March. It has opened pre-booking for the models.
Samsung had steadily lost market share last year — from 25.3 per cent in the June quarter to 15.5 per cent in the December quarter. Samsung, which was once the market leader, was pushed to the third spot by the end of 2019 — behind Xiaomi and Vivo. With its rivals pushed to the corner, it has a chance to extend regain lost ground by April.