Why are Samsung’s factories in Vietnam less affected by coronavirus than such rivals as Apple’s and Google’s?

Samsung Vietnam revealt that their electronic components came from many different countries including China, but mainly from Vietnam and South Korea.

“The outbreak of the corona virus is causing delays to the customs clearance process at the border, so we will use different shipping options including sea and air to ensure stabilizing production, “said the corporation’s representative.

Nikkei said that Samsung’s factories in Vietnam were put back into operation after the Lunar New Year holidays (known as Vietnamese Tet Holidays, on January 30. Meanwhile, many of Samsung’s rivals such as Apple, Google or Huawei are having problems because the supply chain in China is interrupted. Vietnam is currently Samsung’s largest overseas manufacturing base. Revenue from Vietnam accounted for 30% of total revenue of the Korean giant technology corporation in 2018.

The disease caused by the Corona virus outbreak has negatively affected many smartphone factories. Under favorable circumstances, China provided the world with a very sophisticated A – Z supply chain. And with the outbreak of Corona virus, a series of factories in China are seriously affected.

Many factories in Vietnam are in a state of stagnation due to lack of supply of components from China.

According to the Ministry of Planning and Investment, products of the electrical and electronic industry are the items with the largest import-export turnover between Vietnam and China (including the two largest groups of computers, electronic products and components, phones and components, in which, export turnover of these items to China in 2019 was more than 17.8 billion USD and import turnover was nearly 19.7 billion USD).

“In particular, Vietnam’s electronics industry imports electronic components mainly from China. Therefore, quarantine measures will affect the input supply for production as well as the pepper market. For Vietnam’s electronics industry, especially affecting the source of input components for domestic production, MPI stressed.

Representative of Vietnam Electronics Business Association, Ms. Do Thi Thuy Huong said: “Only in 1-2 months will we see clearly the impact of the disease. The risk of stopping production is very high, the payment of salaries for workers, plus the cost of maintaining machinery is also a huge amount”.

(CafeF)