Running from corona crisis, Samsung finds it once again

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Running from corona crisis, Samsung finds it once again

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Employees at Hanoi Airport in Vietnam check the health conditions of passengers.[YONHAP]

Samsung Electronics has been on tenterhooks over increasingly stringent border control measures in Vietnam as it moves to expand smartphone production in the Southeast Asian country.

A spokesperson from Samsung Display confirmed on Monday that it has requested exemptions from Vietnam’s two-week self-quarantine requirement for around 700 Korean employees.

“We are in a discussion with the Vietnamese government after the Vietnam branch of Samsung Display sent the request,” the spokesperson said.

The outreach, the spokesperson said, is in line with its efforts to minimize supply chain disruptions after Samsung Electronics temporarily shut its factory in Gumi, North Gyeongbuk, as a precaution against the outbreak.

“The workforce will be dispatched to help produce flexible organic light-emitting diode (OLED) modules,” the spokesperson said, “We’ve already secured supplies for the newly-released models, such as Galaxy S20 and Z Flip, but the manufacturing of modules for next models could be impacted.”

After a series of coronavirus cases were confirmed at Samsung’s smartphone factory in Gumi, the production of Galaxy S20 was partially moved to Vietnam. A total of 200,000 units per month are to be made there.

Samsung Electronics said that the shifting is a temporary move until the coronavirus crisis passes.

With Samsung Electronics and LG Electronics operating their smartphone and display production lines in Vietnam, Korea’s ambassador to Vietnam requested the Vietnamese government exempt Samsung Electronics from the two-week self-quarantine period for technicians supporting smartphone production.

“If experts and engineers of Samsung Electronics enter Vietnam and are placed in quarantine for 14 days, this large company can suffer great damage,” Ambassador Park Noh-wan was quoted as saying in Hanoi Friday, according to Vietnamese news outlet VnExpress.

“I hope that the two countries will take effective measures to prevent the epidemic but not affect the two countries’ long-term relations,” he said.

Vietnam, which had not reported an official case in more than three weeks, has a total of 30 confirmed patients as of Sunday, according to local media and foreign news outlets.

Since Feb. 15, Vietnam has temporarily removed Korea from its visa exemption list, which allowed Korean passport holders to visit Vietnam without a visa for 15 days.

Samsung Electronics produces half of its annual smartphone production, as much as 150 million units, in Vietnam and LG Electronics moved its smartphone plant to Vietnam last year. If coronavirus spreads in Vietnam, it can disrupt Korean smartphone production.

“The spread of coronavirus in Vietnam is the worst scenario,” an industry official said. “Not only Samsung Electronics and LG Electronics but also others will face a huge crisis.”

Global market research companies predict that the smartphone market will suffer a major setback in the first half of the year due to the new coronavirus.

Strategy Analytics predicts that 10 percent fewer smartphones will be shipped this year.

BY PARK EUN-JEE, JANG JOO-YOUNG [kim.yeonah@joongang.co.kr]

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