At present, the outbreak of novel coronavirus in China has been controlled, but the outbreak in South Korea is not very optimistic. According to the report of the South Korean Central Epidemic Prevention Policy Headquarters on March 1st, as of 9 am, South Korea has newly added 376 confirmed cases of novel coronavirus pneumonia, a total of 3526 were confirmed, and a total of 17 deaths. With the spread of the Korean epidemic, many Korean companies have also been affected.
1st March, according to Reuters, Samsung ’s mobile phone factory in Gumi, South Korea that just resumed work shortly in February 24, announced a temporary suspension of work again today due to the diagnosis of a new infection. It is expected to resume work again in the afternoon of March 3rd.
According to previous reports, on February 22, Samsung Electronics Korea confirmed that a 28-year-old female employee was infected, and the Samsung Electronics factory in Gumi, South Korea, where the employee worked, was completely shut down and closed until February 24. According to Bloomberg, the suspension of Samsung ’s Gumi mobile phone factory may affect Samsung ’s high-end flagship models, including the production of the foldable Galaxy Z Flip and Galaxy Fold.
Although the Samsung Gumi mobile phone factory resumed production on February 24th, only 6 days later, the factory confirmed another employee who tested positive for the new coronavirus. As a result, Samsung's plant was shut down again.
According to Yonhap News Agency, this confirmed case is the third confirmed case of Samsung Electronics' Gumi plant, and all three members of the member's family have been confirmed as well.
This already the second shutdown of Samsung Gumi plant in the short term. It remains to be seen whether production can be resumed on March 3.
At the same time, Reuters said today that LG Display, a large-scale display panel manufacturer, also announced a temporary shutdown of a smartphone screen factory in Gumi, South Korea. The shutdown was because a bank worker near the factory was tested positive for the novel coronavirus.
According to LG Display's estimates, the mobile phone screen factory will resume production on March 3. However, LG Display did not say what effect the temporary suspension of the factory will have on the shipment of its mobile phone screens.
At present, LG Display is the world's top three display panel manufacturers and also the world's top three OLED mobile phone screen supplier. Some Apple models of OLED screens are produced by LG Display. If there are not enough stocks in advance, a few days of factory shutdown may cause a shortage of mobile phone panel supply in the market.
It should be noted that Gumi City is located about 120 miles (193 km) south of Seoul and is a factory city designated by the Korean government. It mainly produces electronic products. In addition to Samsung ’s mobile phone factory, Samsung ’s first mobile phone OLED panel production line, E5 factory, is also located in Gumi City. South Korea's LG and other similar Korean electronics companies also locates here. If the epidemic spreads in Gumi, it will greatly endanger the Korean electronics manufacturing industry.
In addition, it is worth mentioning that on February 19, a new employee of the SK Hynix Icheon plant had close contact with a confirmed case of pneumonia in Daegu City. SK Hynix ’s headquarters in South Korea immediately disinfected and took prevention measures at the working place. It also found all the employees who had contacted with the affected employee, even if they have only walked on the same path, a total of more than 800 employees were quarantined unconditionally. In addition, a new employee has been isolated because he showed symptom of cold. However, subsequent inspections of both employees were negative.
The situation of the epidemic in Korea is not optimistic, which will undoubtedly have a huge impact on the world's electronics industry. Among them, South Korea's Samsung and SK Hynix occupied more than 74% of the global semiconductor market in 2017, and they were also the global leaders in wireless communication equipment industry and display industry. In terms of mobile phones, Samsung OLED screens, Samsung chip manufacturing and foundry, and memory were the top. Once production is reduced, it will inevitably pose a huge challenge to the normal industrial chain. Not to mention the iPhone 12 released in the third quarter, even the next Samsung S20 series and other domestic flagship models will all be affected by.
According to Statista data, Samsung and SK Hynix occupied 12.5% and 5.4% of the global semiconductor market, ranking second and third, respectively. In terms of flash memory, in the fourth quarter of last year, the two companies together accounted for more than 70% of the DRAM market. According to industry insiders, South Korean companies Samsung and SK Hynix are big global storage companies. If the novel coronavirus spreads in South Korea, it will accelerate the rise in global memory chip prices.
Samsung ’s monthly production capacity reached 2.935 million wafers last year, and SK Hynix ’s monthly production capacity was about 1.743 million wafers. It has also reached about 50% market share globally. So, if the Korean semiconductor chip industry does not protect well, the global technology industry supply chain will be subject to large-scale fluctuations, and it is likely to repeat the price rises like several years ago.