Coronavirus may hit Samsung output from Vietnam

Vietnam’s manufacturing sector is suffering supply chain problems caused by the coronavirus epidemic, which may delay production of Samsung Electronics’ new phones, the Ministry of Industry and Trade said on Friday (21).

Samsung is Vietnam’s largest single foreign investor.

The epidemic would have an impact on the production of two new phone models as most of the components are sourced from China.

“Car, electronics and phone manufacturers are experiencing difficulty in acquiring supplies and materials due to disruptions from the virus,” the ministry’s Industry Agency said.

“Vietnam relies much on China for materials and equipment, which makes the country vulnerable when such an outbreak happens,” it said.

Vietnam has recently eased some health-related restrictions on cross-border trade to prop up economic activity. However, some strict measures are still in place.

“Samsung is considering using sea or air transport to import needed components but it would lift the cost and would hardly meet the production schedule and demand,” the agency said.

Samsung said it was “making our best effort to minimise the impact on our operations”.

“If the epidemic is not contained in the next 1-1.5 months, we will be in trouble. Domestic TV’s and phone’s output will sharply decline,” said the Industry Agency, citing a report by the Vietnam Electronics Business Association.

The government said it would stick to this year’s economic growth target of 6.8% and take steps to ease the impact of the outbreak.