Quarantine Policy for Korean Arrivals Implemented at Hanoi Airport
Half of Samsung Smartphones Produced in Vietnam... Growing Concerns Over Supply Disruptions
[Asia Economy Reporter Han Jinju] Concerns are rising that the Vietnamese government's strengthened quarantine measures targeting Koreans to prevent the spread of the novel coronavirus infection (COVID-19) may disrupt the supply chain of Samsung Electronics, which has production facilities in Vietnam.
According to Asian Nikkei Review and others on the 29th, the Vietnamese government has implemented a measure starting from the 28th to quarantine people arriving from Korea, including Vietnamese nationals, at hospitals or other facilities for 14 days at Hanoi Airport. The Vietnamese government has also decided to prohibit visa-free entry for Koreans.
Nikkei explained, "Samsung Electronics announced earlier this month that it is operating its factories at maximum production capacity, but with the strengthened quarantine measures, production activities of Korean companies such as Samsung Electronics may face disruptions," adding, "This decision will be bewildering for Korean companies that have been increasing investments in Vietnam while reducing trade with China."
Half of Samsung Electronics' smartphone production is made in Vietnam. Samsung has two smartphone factories near Hanoi in Bac Ninh and Thai Nguyen. The number of Samsung Electronics employees in Vietnam exceeds 100,000. Due to the Vietnamese government's quarantine measures and visa issuance restrictions amid COVID-19, Samsung Electronics' smartphone supply is inevitably affected.
IT specialized media SamMobile stated, "If production is halted due to the Vietnamese government's 14-day quarantine policy as a COVID-19 preventive measure, supply shortages may occur," adding, "Samsung Electronics accounts for a significant portion of Vietnam's exports, so this could have ripple effects not only on the regional economy but also on the global economy."
Meanwhile, Samsung Electronics has also planned to invest 220 million dollars (approximately 266.3 billion KRW) to build an ICT research and development center in Hanoi by 2022 and to employ about 3,000 engineers locally. The scale of direct investment by Korean companies in Vietnam was the largest at 7 billion dollars in 2019, a 10% increase from the previous year, accounting for 20% of Vietnam's foreign direct investment.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
