Plant Shutdowns on the Rise
South Korean manufacturers are taking a direct hit from the spread of COVID-19. Samsung Electronics’ Gumi Plant, where infections were confirmed on Feb. 22, 28 and 29, were shut down on March 1 with a partial shutdown until the morning of March 3. The company’s Giheung Plant was partially shut down after an infection was confirmed on Feb. 29, too.
LG Display’s Gumi Plant was shut down from Feb. 28 to March 2 and those working in LG Group’s Twin Tower in Yeouido could not go to work on Feb. 28. In Hyundai Motor Group’s Ulsan Plant, a painting worker’s infection led to quarantine and production line shutdown on Feb. 28 before operation resumption on March 2.
A decline in the global demand for South Korean products is becoming a reality. Although the server memory chip demand is continuing to increase, things can drastically change in the second quarter. According to market research firm Stone Partners, the Chinese smartphone market is likely to shrink by 40 percent to 50 percent from a year ago.
The same applies to South Korean petroleum and chemical companies, which had to face rising crude oil prices early this year. Some of those companies are already reducing their operation in certain regions.