Samsung Electronics temporarily shut down smartphone production at its manufacturing unit in Gumi, South Korea following a positive coronavirus infection. Production stopped over the weekend but is scheduled to resume from Feb. 25 if the infection is contained. Samsung manufactures the latest Galaxy S20 and the Galaxy Z Flip at the Gumi unit. Any delay in production could lead to a massive global supply crunch after launch.
South Korea has witnessed a massive coronavirus outbreak recently, with Daegu city at the heart of it. Gumi is barely 40 km from Daegu and runs a high risk of infection. According to Samsung’s official statement, a member of its Gumi workforce was diagnosed with COVID-19 on February 22. Samsung’s Emergency Response Task Force immediately closed operations, urging employees to practice self-quarantine at home.
While Samsung manufactures a bunch of devices in Vietnam and China, top-of-the-line handsets like the Galaxy Fold are manufactured at its production line in Gumi. Following the detection, a local news portal confirmed that every person to have come in contact with the infected employee have been quarantined. While Samsung advises the rest of its workforce to practice cautionary measures like wearing masks and avoiding direct or passive contact with co-workers.
Samsung further advised employees to avoid public transportation and conduct business meetings via video conference. Inter-facility operations between Gumi and Samsung’s headquarters in Suwon has also been temporarily suspended. The spread of COVID-19 could further jeopardize the already weak South Korean economy, as major businesses could shut shop fearing another Wuhan-like catastrophe.
Samsung’s manufacturing unit in Gumi is located within the Gumi Industrial Complex in Imsu-dong. The facility primarily houses the smartphone Research and Development wing and production line. Although Samsung’s budget smartphone lineup will not be affected by the closure, any prolonged delay could affect Samsung’s flagship distribution chain. An official, however, claimed that the weekend closure is not expected to severely hamper the company’s production plans.
Samsung Electronics’ share prices plummeted by 3.7 percent in Seoul on Feb. 22 with the news going public. The timing could not have been any worse as the Won is already at its six-month low, with stock prices heading down the drain with Seoul putting out an infectious disease alert to the highest level with the worsening outbreak. South Korea’s Center for Disease Control recently noted 161 new COVID-19 infections, bringing the country’s total tally up to 763. The death toll rose from 2 to 7 people with Daegu city recording the maximum casualties.
A coronavirus outbreak in Gumi could spell doom for Samsung Electronics, along with a handful of other major tech giants operating from the area, including Toray Group, LG Electronics, LG Display, and a few other businesses. Samsung currently has 2 manufacturing units at Gumi, located 200 km from the national capital.
LG Electronics has advised workers at the Gumi facility traveling from Daegu city to work from home. Workers who have visited Daegu in the recent past have been instructed to stay away from the office for the next two weeks. While headquarter staff need prior permission from the management to visit Daegu city. According to an LG spokesperson, the company’s research center at Incheon was closed down after a worker’s family member was diagnosed with COVID-19.
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