Sony shifts smartphone production to Thailand from China

Thailand scored an investment win last week when Japan’s Sony Corporation announced it will close its smartphone production plant in China and shift operations to Thailand because the Kingdom is more cost effective in manufacturing.

Sony’s smartphone business has been floundering in a very competitive global market, and its executives said they hope to turn the business around and make it profitable by 2020. As such, moving the production facility will help reduce operational costs.

Thailand presents the perfect location for smartphone and other types of manufacturing. The costs of production are relatively low in the Kingdom, while its workforce is better educated than those in other countries where wages are even lower. Thailand’s plentiful infrastructure, investment incentives, and strategic location also contribute to its appeal among manufacturers.

Despite its losses in the smartphone market, Sony executives said they are not planning to throw in the towel. By moving its manufacturing to Thailand, the company hopes to strengthen the unit and hang on until the arrival of 5G, in which Sony believes there may be a future for the company’s handsets and mobile technology. Sony said it expects smartphones to be a central part of fifth-generation wireless networks, where cars and various devices can be connected.

Sony representatives stressed that their decision to abandon smartphone production at its facility near Beijing is not related to the current trade tensions between the United States and China.

Sony’s smartphone business was one of the few weak spots in its otherwise robust earnings, bracing for a loss of $863 million for this financial year. Its share of the global smartphone market has fallen from 3 percent to 1 percent with just 6.5 million sold, far behind competitors Apple, Samsung, and Huawei.

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