Samsung used to be a major force in the Chinese mobile phone market but its share has steadily eroded in the past few years. It’s particularly bad for the company now because by some estimates, its handsets don’t even account for one percent of China’s smartphone market. No wonder the company has decided to shut down one of its two smartphone factories in the country.

Samsung today announced that it’s shutting down one of its mobile phone manufacturing plants in China. It’s located in the northern Chinese city of Tianjin and employs around 2,600 people. It’s going to offer compensation packages to the employees and give them opportunities to transfer to other Samsung facilities. The plant will be shut down before the end of this year.

The company’s market share in China shrunk to below 1 percent in the first quarter of this year as it struggles with intense competition from local rivals like Huawei. That’s quite a long way down considering that it accounted for 15 percent of the Chinese market in 2013.

Samsung also mentioned that it will continue to operate its second phone manufacturing facility in Huizhou, Guangdong for now. The Tianjin plant produced 36 million phones a year while the Huizhou plant makes 72 million units, according to estimates. Samsung hasn’t officially confirmed the plants’ capacities.

Filed in Cellphones. Read more about and . Source: reuters