Outbreak probably won’t affect 5G vendors

The outbreak of the new coronavirus will likely have a limited impact on Korea’s 5G network equipment vendors, analysts believe, owing to their minimal business presence in virus-hit China.

As China struggles to contain the spread of the deadly coronavirus, concerns have been mounting over whether Korea’s network equipment makers will suffer the type of production disruptions that have begun to hurt automakers.

“Most local network equipment makers’ factories are located in Korea and Vietnam,” Kim Hong-sik, an analyst at Hana Financial Investment, said. “It is also expected that demand for Korean-made equipment will not be affected by the coronavirus outbreak.”

Kim pointed out Korean network equipment suppliers have little to lose because their sales related to Chinese businesses were very small, even before the outbreak of the coronavirus.

“Since Korean firms rely on U.S.-made parts for their products, Chinese companies have been already reducing orders for them,” he said.

Industry observers said it’s also hard to imagine Chinese telecommunication firms canceling their 5G investment plans due to the coronavirus crisis, although they may be delayed.

“Three major Chinese telecommunication firms planned to start their 5G base station installations in March, but if the current situation persists, their schedules could be delayed,” Lee Wang-jin, an analyst at eBest Investment Securities, said.

Yonhap