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Li Tao

Samsung Electronics’ closure of its last mobile phone factory in China this year marked the South Korean company’s precipitous fall in the world’s biggest smartphone market.
But that move also signalled the parallel rise of a Chinese hi-tech company that is little known outside the tight circle of original design manufacturers (ODMs) based in the country.
Wingtech Technology, founded in 2006 by former engineer Zhang Xuezheng, has grown from its beginnings in Jiaxing, a city in eastern Zhejiang province famous for its rice dumplings, to become the world’s largest ODM for smartphones.
The company has been identified as one of the Chinese ODMs that Samsung has contracted to assemble its lower and mid-range Galaxy A-series smartphone models, according to sources cited in a Reuters report on Monday.

Industry analysis firm Counterpoint cited the South Korean company’s orders as one of the reasons Wingtech’s share of the global ODM market rose to 28 per cent – a 23 per cent year-on-year increase – in the first half of 2019.
Samsung’s broader outsourcing strategy follows the success of major Chinese smartphone vendors, including Huawei Technologies and Xiaomi Corp, in contracting domestic ODMs to assemble a range of models, especially lower-cost handsets for certain segments of the mainland market.
An ODM designs and manufactures products based on predetermined specifications for client firms, which sells these under their own brands. By comparison, iPhone maker Foxconn Technology Group represents an original equipment manufacturer, which is licensed to assemble a product that is fully designed by its client company.
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“ODMs help smartphone brands achieve mass production at a relatively lower cost, which is especially helpful when market demand slows down,” said Zaker Li, a senior industry analyst with IHS Markit.
Wingtech, which started making tablets and smartphones for Samsung in 2017, accounted for 3 per cent of the Korean electronics giant’s phones. That is expected to hit 8 per cent, or 24 million units, this year, according to data from research firm IHS Markit cited by Reuters. The report said Samsung plans to ship some 60 million smartphones made by Chinese ODMs next year out of a total of about 300 million devices.
Deng Anming, director at Wingtech’s planning department, said in a telephone interview on Tuesday that the company does not comment on its client companies. Deng said ODMs, in general, have helped mobile phone brands improve efficiency and achieve rapid global delivery, while ensuring high quality and lower costs.
Will closing last Samsung factory hurt China’s role in global value chain?
Wingtech has seen its fortunes prosper amid China’s development as the world’s biggest smartphone market, where it has become a major handset assembler for some of the country’s top brands.
The Shanghai-listed company has focused on producing smartphones that are priced from 1,000 to 2,000 yuan (US$142 to US$285), which is a product segment that currently accounts for 70 per cent of overall unit shipments in China. It has seen much success with Xiaomi Corp’s low-cost Redmi line, which was spun off as an independent brand earlier this year. Its other prominent Android smartphone clients include Huawei, Oppo and Lenovo Group.
Among China’s smartphone ODMs, Wingtech continues to lead its market segment, with shipments of 51 million units, under its clients’ various brands, in the first six months of this year, according to an IHS Markit report. In the same period, rivals Longcheer shipped 39 million smartphones and Huaqin Telecom Technology had 38 million units.
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Wingtech’s profile first gained international prominence in April last year, when the company disclosed that it was buying Netherlands-based chip maker Nexperia for nearly US$4 billion. That deal, which was completed this year, represented China’s focus on gaining self-sufficiency and parity in semiconductors, which go into and power everything from smartphones and smart speakers to the most advanced super computers and autonomous cars.
Apart from smartphones, Wingtech also produces laptop computers, virtual reality gear, networking equipment used in vehicles and so-called Internet of Things devices, among a range of electronics hardware. The company also runs research centres in Shanghai, Xi’an and Shenzhen, as well as innovation hubs in the US, Japan and South Korea.
The advent of 5G mobile services will see Wingtech move the smartphone industry to cheaper 5G handsets, according to company director Deng. With peak data rates up to 100 times faster than what current 4G networks provide, 5G has been held out as “the connective tissue” for the Internet of Things, autonomous cars, smart cities and other new mobile applications, establishing the backbone for the industrial internet.

For more insights into China tech, sign up for our tech newsletters, subscribe to our award-winning Inside China Tech podcast, and download the comprehensive 2019 China Internet Report. Also roam China Tech City, an award-winning interactive digital map at our sister site Abacus.



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Samsung’s manufacturing retreat from China leaves room for outsourcing provider Wingtech to grow

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The small black rectangles on the chip are the “resistors” that detect “deformations” from the surface to which they’re attached. Then these resistors send information to the device’s chipset, which then uses New Degree Technology’s custom software algorithm to turn physical analog force into digital information.

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Tech

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Shanghai-listed Wingtech is focused on producing low-cost smartphones
The company plans to help brands introduce cheaper 5G handsets from the second half of next year



Samsung closed its last smartphone factory in China and is outsourcing production to local companies including Wingtech, which has grown to become the world's biggest original design manufacturer of smartphones.


Samsung Electronics

China technology

Samsung’s manufacturing retreat from China leaves room for outsourcing provider Wingtech to grow

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} Shanghai-listed Wingtech is focused on producing low-cost smartphones The company plans to help brands introduce cheaper 5G handsets from the second half of next year

Shanghai-listed Wingtech is focused on producing low-cost smartphones

The company plans to help brands introduce cheaper 5G handsets from the second half of next year