Samsung has been utilizing Joint Design Manufacturing (JDM) partnerships with Chinese companies to produce smartphones, a cost-saving tactic primarily used for budget-friendly models. Now, the tech giant is looking to expand this collaboration further.

Reports suggest that Samsung aims to increase smartphone production through Chinese JDM partners from 44 million units to 67 million units in 2024. This boost would account for 25% of Samsung’s targeted production of 270 million units this year.

In JDM partnerships, Samsung and its Chinese counterparts work together on the design process, sharing profits from sales. Once the design is finalized, Samsung proceeds with mass production as the original equipment manufacturer (OEM).

Partnering with local firms in China allows Samsung to share production costs and align with regional design preferences if necessary. This strategy is especially beneficial given Samsung’s smaller market share in China.

Despite investing $24 billion in the Chinese market over six years, Samsung has faced challenges due to US-China tensions and export restrictions on advanced chips. A meeting between a high-ranking Chinese official and a Korean executive indicates a push for increased investment and business collaboration between the two countries.

As Samsung continues to navigate the complexities of global trade dynamics, its focus on JDM partnerships underscores a strategic approach to manufacturing smartphones efficiently and effectively in China.