Samsung has reported its first coronavirus infection in one of its chip factories as the fallout from the pandemic is reshaping global technology supply chains.
The South Korean technology group confirmed on Tuesday that an employee of one of its computer chip manufacturing plants near Giheung, south of Seoul, had tested positive for coronavirus.
Production at the factory continued, but a group of employees who were in contact with the infected person isolate themselves, a spokesperson said.
Samsung is the world’s largest producer of computer chips, smartphones and electronic displays. Analysts have warned that any substantial disruption to Samsung’s chip production could wreak havoc on the South Korean economy and global supply chains.
According to a person familiar with the situation, the infected employee worked on a semiconductor foundry line producing system chips. Health officials assess how the employee contracted the virus.
Technology and industry groups in South Korea, including Samsung, Hyundai, SK and LG, have been under intense pressure since reports of the virus epidemic in January.
They were faced with initial problems caused by declining demand and Chinese supply shortages resulting from massive closures as Beijing struggled to contain the virus, originally from Wuhan, a city in central China. Last month, South Korean industrial production contracted at its fastest pace since the global financial crisis, according to official data released Tuesday.
Now that the pandemic is causing consumer spending to collapse in major developed markets, including the United States and Europe, groups face growing uncertainty about the level of demand for new products from Korea. of the South dependent on exports.
CW Chung, head of research at Nomura in Seoul, said that while technology groups in the country have put in place measures to prevent the virus from affecting production, “major disruptions” cannot be ruled out.
Chung added that tougher travel restrictions also pose problems for plans to modernize and expand facilities in the region.
“Engineers [from Samsung and SK Hynix] must travel to the United States and Japan to purchase new equipment, and then install it in their Chinese factories, as the companies plan to expand their chip investments in China this year, “he said.
The Giheung affair is also a concern for Samsung given its insistence for several months that its chip manufacturing facilities should not be disrupted as factories are highly automated, its factory environments are tightly controlled and strict disinfection measures are in place. This contrasts with the factories of smartphones and devices, where human assembly work is more common.
The chip factory affair follows several temporary closings at other Samsung factories, including facilities manufacturing smartphones.
The news came when the Samsung affiliate confirmed on Tuesday that it would stop production of all liquid crystal displays by the end of the year.
Samsung Display, which has LCD production lines in South Korea and China, has been hit by overcapacity. Last year, the company announced plans to accelerate efforts to switch to organic light emitting diode (OLED) screens as it attempts to compete with LG Display in the growing market for large television screens.
Editor’s note
The Financial Times makes the coverage of major coronaviruses free to read to help everyone stay informed. Find the latest news here.
Samsung has reported its first coronavirus infection in one of its chip factories as the fallout from the pandemic is reshaping global technology supply chains.
The South Korean technology group confirmed on Tuesday that an employee of one of its computer chip manufacturing plants near Giheung, south of Seoul, had tested positive for coronavirus.
Production at the factory continued, but a group of employees who were in contact with the infected person isolate themselves, a spokesperson said.
Samsung is the world’s largest producer of computer chips, smartphones and electronic displays. Analysts have warned that any substantial disruption to Samsung’s chip production could wreak havoc on the South Korean economy and global supply chains.
According to a person familiar with the situation, the infected employee worked on a semiconductor foundry line producing system chips. Health officials assess how the employee contracted the virus.
Technology and industry groups in South Korea, including Samsung, Hyundai, SK and LG, have been under intense pressure since reports of the virus epidemic in January.
They were faced with initial problems caused by declining demand and Chinese supply shortages resulting from massive closures as Beijing struggled to contain the virus, originally from Wuhan, a city in central China. Last month, South Korean industrial production contracted at its fastest pace since the global financial crisis, according to official data released Tuesday.
Now that the pandemic is causing consumer spending to collapse in major developed markets, including the United States and Europe, groups face growing uncertainty about the level of demand for new products from Korea. of the South dependent on exports.
CW Chung, head of research at Nomura in Seoul, said that while technology groups in the country have put in place measures to prevent the virus from affecting production, “major disruptions” cannot be ruled out.
Chung added that tougher travel restrictions also pose problems for plans to modernize and expand facilities in the region.
“Engineers [from Samsung and SK Hynix] must travel to the United States and Japan to purchase new equipment, and then install it in their Chinese factories, as the companies plan to expand their chip investments in China this year, “he said.
The Giheung affair is also a concern for Samsung given its insistence for several months that its chip manufacturing facilities should not be disrupted as factories are highly automated, its factory environments are tightly controlled and strict disinfection measures are in place. This contrasts with the factories of smartphones and devices, where human assembly work is more common.
The chip factory affair follows several temporary closings at other Samsung factories, including facilities manufacturing smartphones.
The news came when the Samsung affiliate confirmed on Tuesday that it would stop production of all liquid crystal displays by the end of the year.
Samsung Display, which has LCD production lines in South Korea and China, has been hit by overcapacity. Last year, the company announced plans to accelerate efforts to switch to organic light emitting diode (OLED) screens as it attempts to compete with LG Display in the growing market for large television screens.
Editor’s note
The Financial Times makes the coverage of major coronaviruses free to read to help everyone stay informed. Find the latest news here.