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Restrictions on business trips to Vietnam by engineers of South Korean companies are already having a palpable negative impact. The Vietnamese government disallowed visa-free entry for South Korean passport holders as a response measure to the novel coronavirus outbreak. Over 700 employees at Samsung Display alone have been prevented from traveling to Vietnam, which is resulting in difficulties for the company. The South Korean Ambassador to Vietnam has begun urging the country to “permit exceptional entries for business travelers whose health status has been verified.”

According to accounts from industry sources on Mar. 9, Samsung Display has had around 700 of its own employees and employees of partner businesses that it has needed to send to Vietnam since late last month, but the employees have been unable to travel there after the Vietnamese government barred visa-free entry to South Koreans on Feb. 29 and imposed a “14-day quarantine” condition on arriving travelers due to South Korea’s novel coronavirus outbreak.

Samsung Display’s Vietnam factory

Samsung Display’s Vietnamese factory is a key workplace that accounted for 19.8 trillion won (US$16.59 billion) in annual sales as of late 2018, or 62.5% of the company’s 32 trillion won (US$26.81 billion) in total sales. The items produced at its module plant, including flexible small-scale OLED (organic light emitting diode) displays, are supplied to major smartphone manufacturers, including Huawei and Apple along with parent company Samsung Electronics, and facilities renovations are currently needed in preparation for the launch of new smartphone products in the second half of the year. Samsung Display has been drawing particular attention with the growth of the global market, including the supply of flexible displays applying ultra-thin glass (UTG) for the first time with the Samsung Electronics Galaxy Z Flip foldable smartphone. It needs to renovate its facilities to meet global demand -- but the technicians are currently unable to even board an airplane to Vietnam.

The situation has even prompted the South Korean Ambassador to Vietnam to issue an appeal. Meeting with reporters from local media in Hanoi on Mar. 7, Ambassador Park Noh-wan explained, “Samsung needs to bring around 1,000 experts to Vietnam for the operation of its production line.”

“Large losses could result if engineers are kept in isolation for 14 days,” he warned.

Park insisted that “entry exceptions should be recognized in cases where [travelers] have diagnosis documents [indicating negative coronavirus test results] from South Korean medical institutions.”

A display industry source said, “We’ve been continuing to solicit the assistance of South Korean diplomatic authorities and the Vietnamese government.” Another source said, “It isn’t just Samsung Display but all electronics and IT businesses that are facing the same issues.”

With major South Korean companies stepping up production volumes after selecting Vietnam as a “post-China” production base, the losses to domestic businesses appear poised to only increase over time. Samsung Electronics uses Vietnam for half of its roughly 300 million units in annual smartphone production volume; LG Electronics closed its South Korean smartphone factory last year and relocated its production base to Vietnam.

After factory operations at its Gumi facility in North Gyeongsang Province were recently suspended three times in a row with the coronavirus diagnosis of a fifth employee, Samsung Electronics established plans to produce up to 200,000 units from Gumi’s Galaxy S20 volume in Vietnam for importation back into South Korea.

By Song Gyung-hwa, staff reporter

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