Samsung Electronics said it will temporarily move some of its smartphone production to Vietnam, after shutting down a factory in South Korea following a confirmed case of Covid-19 there, Reuters reported.

Samsung Galaxy S20. Source: Samsung.

Samsung shut down the factory in the southeastern city of Gumi after a worker tested positive for the new coronavirus. Samsung said the plant will be closed through Saturday, while the floor where the employee worked will be shuttered through Sunday.

Samsung's premium smartphones, Galaxy S20 and Galaxy Note 10, were being produced entirely in Gumi. Its plant in Vietnam will put out up to 200,000 smartphones a month. They will be shipped to South Korea beginning late this month.

The world's largest smartphone maker has so far reported six virus-infected workers at its production sites in Gumi, North Gyeongsang Province, only about 50 kilometers north of Daegu, the epicenter of South Korea's virus outbreak.

The move to shift output of “some premium smartphones” to Vietnam “intends to supply products to consumers in more effective, stable and timely manner,” Samsung said in a statement.

“Once the Covid-19 situation stabilizes, we plan to move back the output to Gumi,” it said.

Samsung launched its S20 flagship smartphones globally last Friday as scheduled amid concerns that the virus would dent demand for premium phones at home and overseas markets.

According to Samsung's statistics, around 50% of Samsung's smartphones and tablets are produced in Vietnam and exported to 128 countries and territories, including the US, Europe, Russia and Southeast Asia.

In the 2008 – 2018 period, Samsung increased its total investment in Vietnam from US$670 million to over US$17.3 billion, a 26-fold increase. 

VnExpress cited South Korean Ambassador to Vietnam Park Noh-wan said on March 6 Samsung is planning to bring more than 1,000 South Korean experts into Vietnam to support its production chain.

However, Vietnam’s recent policies to quarantine all South Koreans entering Vietnam may jeopardize Samsung’s plan and cause a potential loss of up to US$10 billion for the IT giant.

Park asked local authorities to adjust the policy for employees from South Korean companies, particularly Samsung and LG, that they will be exempted from quarantine.