Samsung Electro-Mechanics' Kunshan factory in China has closed its doors for the first time in 15 years. Samsung Electro-Mechanics plans to focus on high-value-added businesses by reorganizing the Kunshan factory, which was producing main circuit boards (HDI), following the liquidation of its Dongguan subsidiary in China.
According to the audit report released by Samsung Electro-Mechanics on the 24th for 2024, the liquidation process of its Kunshan subsidiary, which had been ongoing since the end of 2019, was completed at the end of last year.
Initially, Samsung Electro-Mechanics established its Kunshan subsidiary in 2009 to target the rapidly growing smartphone market, starting production of HDI for smartphones. However, as the barriers to entry were low, competitors from China and elsewhere easily entered the market, significantly deteriorating revenue.
As a result, Samsung Electro-Mechanics decided to withdraw from the Kunshan factory in December 2019, completing approximately five years of liquidation work at the end of last year, thereby completely exiting from the HDI for smartphones.
Additionally, Samsung Electro-Mechanics completed the liquidation of its Dongguan factory at the end of 2023. The Dongguan subsidiary, which produced speakers, decks, keyboards, and floppy disk drives (FDD), was the first subsidiary established in China by the Samsung Group in line with the establishment of diplomatic relations between South Korea and China in 1992.
With Samsung Electro-Mechanics liquidating its two subsidiaries in China, the remaining operating factories in China are only the facilities in Goshin and Tianjin.
The Tianjin facility is a key production base for Samsung Electro-Mechanics' main product, MLCC, and was personally visited by Lee Jae-yong, Chairman of Samsung Electronics.
As the high-value markets of artificial intelligence (AI) and automotive electronics continue to grow, Samsung Electro-Mechanics plans to accelerate its market entry by focusing on advanced semiconductor substrates such as flip-chip ball grid arrays (FC-BGA), automotive MLCC, and glass substrates.