Samsung may shift US supplies to India, eyes Trump's tariff decisions

Business Standard

5 days ago

South Korean electronics giant Samsung is closely monitoring the Trump administration's ongoing trade negotiations and is prepared to supply products to the US market from multiple manufacturing locations, including India, depending on the outcomes, a senior company official said on Wednesday.
Admitting that "very high" uncertainty in America necessitated its state of preparedness for various scenarios, Samsung asserted that it has a well-strategised diversification plan in place and would respond with flexibility.
"The uncertainty in the US is currently very high, and because of that, we have been preparing against a number of different scenarios. We are ready to produce for the US from multiple factories, including India," Samsung COO MX division - Won-Joon Choi told reporters.
The company, he said, has braced for different scenarios, and is prepared when it comes to diversification of factories for the product it will ship to the US.
"One of the things that we have prepared was to have diversification of our factories for the product we will ship to the US. Depending on the final decision by the Trump administration, we have already established a system in which we can shift from one to another to respond to the final decision more flexibly," Choi said.
The company will shift manufacturing to its India-based production facility for shipment to the US market from its other global locations, a move to bring stability in business and price, Choi said.
The South Korean Chaebol -- which operates several factories around the globe in countries like China, Vietnam, and India, among others -- is ready for diversification of its production for its shipment to the US, its biggest market.
However, this will depend on the final decision by the Trump administration under its new policy, which has country-specific tariffs, he pointed out.
According to Choi, the situation in the US is quite tenable, and uncertainty is very high, and Samsung was preparing against such scenarios.
In 2024, America Zone contributed 39 per cent of Samsung's sales, followed by Europe, Asia, Africa, China and South Korea, according to marketscreener data.
Samsung has a large production facility in Vietnam, which is its main production base for smartphones.
The Trump administration has announced a 20 per cent tariff on Vietnam exports to the US under the new trade deal announced on July 3.
India, where Samsung has a large production facility for smartphones and other products, is seen as an alternative to Vietnam.
The new Trump administration is reshaping the US trade policy and working on reciprocity. It is using tariffs to address trade imbalances and promote domestic production.
Earlier this week, President Donald Trump said the higher rates are set to take effect on August 1, 2025.
It has decided to impose a 25 per cent tariff on imports from South Korea and Japan.
Several countries, including India, are engaged in negotiations of trade pacts with the US government.
Choi said Samsung had such scenario planning to make sure that "we can secure our business stability and price stability for the consumers as well".
When asked whether the recent ban by China on the export of rare earth material will impact the global production of Samsung, Choi said: "For the near term, there have been no production disruptions so far".
However, without mentioning the name of the country, he said Samsung has long been managing its global supply chain and is trying to diversify it.
"So, even for the rare earth metals, we have been trying to source from different companies, different countries, although I am not able to name names, but we have long been seeking diversification," he said.
Samsung on Thursday here launched its latest Fold 7, Flip 7 and Flip 7 FE in its latest Galaxy Z series of premium foldable smartphones.
"?In the smartphone market, especially in the premium market, we will continue to enhance the foldable form factor as it represents one of the most important form factors for us in the premium market, and we will continue to develop it," he pointed out.
Over the use of Artificial Intelligence in phone systems, Choi said he believes that "we are very much nearing the tipping point".
Samsung has partnered with Google and has integrated its Gemini AI into its devices.
According to Choi, the basic feature of Galaxy AI would not be paid.
"Our policy is that for the basic AI features, they will remain free or remain at no additional cost. Now, having said that, about the premium AI experience that we are developing, both on our own and also in partnership with other companies, we are still in discussion about our policy about the premium AI experience," he said.
Samsung is having Galaxy AI and Gemini on its smartphones. It gives users freedom to opt for any one of them. It is also open to add more such AI systems on its platform, Choi added.
"We are open to using any other competitive or most competitive agents. We are willing to integrate those into our Galaxy ecosystem," he said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)