Amid an unrelenting coronavirus outbreak, Samsung Electronics has announced shifting some of its domestic phone production to Vietnam due to the increasing number of reported cases in its home plant of South Korea.
Samsung has decided to move the smart phone production of about 200,000 units per month to Vietnam. The company on Friday closed down its plant in Gumi, the industrial city in South-East part of the country. There have been six confirmed cases in the factory which is located close to Daegu, the fourth largest city in South Korea which is the epicentre of the virus outbreak in the country. The factory has within it a population of about 10,000 workers and has been shut down a few times in an attempt to quarantine the workers amid the spread of the virus.
For domestic producers, Gumi is the site for production of the company’s signature smartphone the galaxy S20 and a foldable phone, the Galaxy Z flip. The move according to the company will aid the “stable production” of its goods and wants to deliver to its consumers in an “effective, stable and timely manner”. The electronics company has called the move a “precautionary” one and plans to bring production back to Gumi when appropriate to do so.
South Korea has reported over 6,500 infections so far. As health authorities do everything in their power to contain the epidemic, South Korean companies are facing damages within their supply chain. Amid worker quarantines and increased spread of the virus, some domestic part makers have reported problems from sourcing from China and Vietnam as well as disruptions in local production.
Since the outbreak, companies have recorded their inventories becoming tighter as well as a fall in the number of orders coming in. In addition to this, there have been delays in the delivery of parts which in turn delays the assembling process the efficiency of which is compromised due to workforce being quarantined. The outbreak has hit companies hard and may push them into crisis.
Countries like India, where manufacturing is dependent on the likes of China and others, have thought of ways such as airlifting crucial components, among others, to fight an embattled economic situation.