Samsung Electronics will shut down its Slovakia plant, one of its European TV production bases, 24 years after its establishment.
According to the industry on the 19th, Samsung Electronics has decided to close its Galanta TV plant in Slovakia and has begun related work. Plant operations are expected to be fully halted in May. The local plant employs about 700 people.
Since its establishment in 2002, the Galanta plant has produced TVs for the European market. The decision is seen as an effort to improve operational efficiency, considering the prolonged low growth in the global TV market, intensifying competition, and local production expense.
In the industry, the closure of the Slovakia plant is also interpreted as part of the finished goods business streamlining that has been underway since last year. In the fourth quarter of last year, Samsung Electronics' DA (home appliances) and VD (TV) divisions posted revenue of 14.8 trillion won and an operating loss of 600 billion won.
Revenue inched up from the previous quarter (13.9 trillion won), but the operating loss widened from 100 billion won to around 500 billion won, marking a record deficit. On an annual basis, a 200 billion won loss occurred, and a similar level of loss is expected this year.
In a survey by market research firm Counterpoint Research, Samsung Electronics maintained its No. 1 position globally last year with a 15% share, but in December last year it fell behind TCL to second place, as Chinese companies' offensives continue to intensify.
In response, Samsung Electronics is pursuing operational efficiency in its TV business, including adjustments to its global production bases. It also plans to reallocate volumes by production hub to match diverse regional consumer demand, and it is streamlining internal business organizations.