Despite competitors in the smartphone market, Samsung and Huawei are partners in the electronics segment. This is because South Korea is responsible for supplying much of the parts that the Chinese use in its products.
However, according to an internal report from Samsung itself, this is expected to change within the next five years. The main reason is that Huawei must become a South Korean competitor in the semiconductor market and leave the podium as the largest buyer of foreign parts.
With a heightened trade war between China and the United States, Beijing has been encouraging local companies to invest in their own components. The idea is to eliminate foreign dependency in all market segments.
According to data from the Chinese government itself, the new “China Manufacturing” program must completely modify the local business production chain by 2025. To this end, Beijing has created a series of tax incentives to make its companies self-sufficient.
The measure should also benefit other Chinese, such as Oppo, Vivo, Xiaomi, and ZTE. Therefore, Samsung has begun to view the initiative with a certain amount of distrust as it may lose its dominant position in the semiconductor segment.
For now, we do not know whether the Chinese government’s move will completely change the landscape in the electronics market. Even so, Samsung must be prepared to face yet another strong competitor, while Huawei has already proven to be able to make a smartphone with fully proprietary parts.
Do you believe Chinese government incentives will create a strong competitor for Samsung? Tell us your expectations here in the comments.