Samsung Reroutes Production to Vietnam as Coronavirus Disrupts Operation in China

Changing Tactics to Keep Production Up

Korean smartphone manufacturer Samsung has begun moving parts of its Galaxy smartphone series from its factory in China to Vietnam as the country continues to struggle with the spread of the virus.

Samsung flies phone parts to Vietnam after coronavirus hits supply chain https://t.co/OlnvejRyOS

— FT China (@ftchina) February 17, 2020

Citing people familiar with the firm, the Financial Times explains that while the Vietnamese government has restricted supply transportation through certain land routes, the company has now started flying and shipping the parts from China, thus helping to reduce travel time significantly. Vietnam has already blocked trade routes from China for the time being, as the country is also working on mitigating the spread of the virus. However, manufacturers have been acutely vulnerable due to this, as most of their supply chains come from China. Production is likely to be disrupted across several industries, as the government continues to prioritize lives over economic growth. Samsung already has a heavy reliance on Vietnam. The firm’s factories in the Bac Ninh and Thai Nguyen provinces reportedly produce two-thirds of all of the company’s devices. Given that most of their supply chains will involve China, the Korean firm has been quick to innovate in order to optimize production. A spokesperson for the company confirmed to the Financial Times that Samsung has been working to minimize the effects of the virus, adding that the virus has so far not caused production to slow.

Samsung Isn’t Overly Worried

The same sentiment was shared by Conor Pierce, the head of Samsung for the United Kingdom and Ireland. Samsung released a trove of new devices last week, with several old and new flagship products- particularly the Galaxy s20 and Galaxy Z Flip- hitting the market and customers looking to get their hands on them. However, many also feared that production and deliveries would be affected by the current epidemic. Replying, Pierce reassured users that they will still be able to get their new devices on time. Pierce explained that the phone maker transferred most of their raw materials to the Vietnam factories to ensure production isn’t disrupted. The company was also vigilant during the launch of the new smartphones last week. The launch, which took place at the company’s Unpacked 2020 event in San Francisco, was heavily monitored to help prevent any virus spreads. Face masks and hand sanitizers were even distributed for attendees. The company also installed thermal imaging cameras at the Palace of Fine Arts to help detect if any attendees could be ill. “In an effort to protect the health and well-being of attendees, anyone who displays unusual or extreme respiratory symptoms will be asked to consult with a medical supervisor onsite,” the company said ahead of the event.