Japanese camera maker Canon has decided to shut down its subsidiary in Zhuhai, South China's Guangdong Province, just ahead of the Chinese unit's 32nd anniversary on Saturday, according to media reports. The firm blamed a shrinking camera market globally and pressure from the COVID-19 pandemic.

The global camera market has been shrinking sharply in recent years and the prolonged pandemic has subjected the company's operations to unprecedented difficulties, the National Business Daily (NBD) reported Friday, citing a screenshot of the Zhuhai unit's termination notice on Wednesday.

The management committee of the Zhuhai high-tech industrial development zone confirmed the news when contacted by China Business News (CBN) on Thursday.

Canon's Zhuhai unit has filed its decision with the management committee, a CBN report said on Thursday, and the company is in talks with its employees over settlement agreements. 

The Zhuhai company has been preparing for its shutdown, Chinese financial news site caixin.com reported on Friday, quoting a source close to Canon.

The popularity of smartphones in recent years is a big factor behind the sluggish operations at the Zhuhai unit, which mainly assembles small digital cameras, the source said.

By the end of 2020, investment in the Zhuhai subsidiary had reached $220 million, with 1,317 employees. Its production of lenses totaled 12.29 million in 2020, and it produced 1.03 million digital cameras and 94,000 digital video cameras, according to an annual report posted on the company's website in December.

The rise of smartphones with ever-improving camera functions has battered the market for digital cameras. Shipments of digital cameras have plunged to less than 10 million from 120 million over the past 11 years, a drop of 93 percent, per the NBD report.

The pandemic has also dealt a heavy blow to the market, with data from the Camera and Imaging Products Association (CIPA) in Japan showing global digital camera shipments of merely 8.89 million in 2020.

The reading for November 2021 fell about 30 percent from the year before and tumbled 48.7 percent from November 2019, according to the CIPA data.

The Zhuhai plant is located in the high-tech zone, which has total investment of 1.5 billion yuan ($236.11 million) and covers an area of 200,000 square meters, according to the NBD report.

The plant is Canon's only manufacturing base in the Chinese mainland for digital cameras, digital video cameras, image sensors and lenses, the NBD report said, adding that its shutdown suggests that Canon has decided to relocate camera production away from the mainland.