On March 10th, according to foreign media reports, South Korea’s “Silicon Valley” is suffering an unprecedented impact due to the new crown pneumonia epidemic. Companies such as Samsung Electronics and SK Hynix, which occupy important positions in the semiconductor and electronics industries in Korea and the world, are also facing numerous crises.
It is understood that as a powerhouse in the semiconductor industry, if the epidemic in South Korea continues to worsen, the shortage of key supplies may bring a series of chain reactions to the global electronics industry chain.
Daegu City is the area with the worst outbreak in South Korea. Except for Daegu City, the most serious is Gyeongsangbuk-do, the nearest administrative district. Gyeongsangbuk-do is the manufacturing center of South Korea. Its subordinate Yuwei City is known as the “Silicon Valley” of South Korea. The heart of South Korea’s manufacturing industry-Gumi Industrial Park is located in this city.
Affected by the new crown pneumonia epidemic in Daegu City, LG and LG Display also quarantined more than 900 employees who live in Daegu, who account for about 10% of LG Gumi factory employees. The factory mainly produces OLED screens that are exported to the world. If the factory is closed, OLED screen factories in Poland, Mexico, Russia and other places will have difficulties in production.
In addition, the South Korean company SK Group’s plant in Gumi is the only polysilicon production plant in South Korea. Polysilicon is a necessary material for the production of semiconductors. If the factory reduces or closes production, it will cause a chain blow to South Korean semiconductor manufacturers. Although Samsung and SK Hynix’s factories in other regions have not stopped work so far, in the short term, the impact on South Korea’s electronics and semiconductor industries is not obvious, but once the epidemic continues to worsen, the shortage of key supplies will affect the global industry. The chain brings huge losses.
For semiconductor manufacturing companies, due to the particularity of the production process, production facilities need to operate around the clock, and shutdown is a loss. If a production line is paralyzed due to unexpected reasons, then the chip manufacturer will suffer a huge blow. Samsung Electronics’ suspension of production due to a 5-minute power outage previously caused Samsung Electronics’ losses to reach approximately 2 trillion won (approximately 11.52 billion yuan).
At the same time, due to the severity of the epidemic, many countries have imposed entry bans on South Korean nationals. Foreign buyers and investors have also been postponing interactions with overseas Korean businessmen. This has caused a huge impact on the overseas business of Korean companies such as Samsung and LG. Influence.