Korean tech firms to resume production in China

South Korean tech firms plan to resume operations at their facilities in China on Monday -- after an extended 17-day holiday for Lunar New Year -- despite the ceaseless spread of the novel coronavirus across the world. 

However, it is expected to take quite some time for them to fully recover their operation rates due to possible workforce shortages stemming from the rising number of virus infections in China, with fewer number of returning workers from the holiday in healthy conditions.

Samsung Display plans to reopen its factories on Monday, while continuing discussions with different municipal governments as they have implemented different measures to contain the viral outbreak.

During the Lunar New Year holiday, Samsung Display reduced operations of its factories for liquid-crystal display panels and display modules in Suzhou and Dongguan, respectively, at minimal levels.

LG Display will also restart its display module plants in Yentai and Nanjing on Monday, according to the company.

In the meantime, LG Display will push ahead with the completion of its new Guangzhou plant as scheduled, it said.

LG Display had planned to start running the new facility for organic light-emitting diode panels in the first quarter.

Korean battery makers, LG Chem and SK Innovation, will also resume production at their plants in Nanjing and Changzhou, respectively, on the same day.

LG Chem said the company plans to run its lines with the minimum number of employees hoping to eventually return to normal operations.

However, it remains uncertain yet exactly when the full operations would be possible at the Korean tech firms’ China-based factories, as local workers are expected to return later than they had planned amid persisting anxieties about health conditions.

“Although Korean firms are now starting to get back on track in terms of manufacturing after the extended holidays, it is expected to take time for them to fully recover production rates due to lack of employees on-site,” said an industry official.

Meanwhile, China-based Korean electronic parts suppliers are now keeping their eyes on any possible changes in overall demand in China as they could face a decline in shipments if end-product manufacturers would have to readjust their productions if they are unable to secure other parts and materials.

“(In the manufacturing network of display), if one sector suspends production, a setback is inevitable,” an LG Display official said.

The Korean firms are also ready to ramp up efforts to secure parts and materials to counter potential shortages, which could also affect the overall operations of the plants, according to a local market analyst.

By Shim Woo-hyun (ws@heraldcorp.com)