What Will Happen to Android Device Production in Case of Korean War

What Will Happen to Android Device Production in Case of Korean War

An analyst says that a war in the Korean peninsula could directly and significantly affect electronic device manufacturing (including Android smartphones and tablets), as many important components are currently mass-produced in South Korea.

IHS analyst Mike Howard said (viaComputerWorld) that in the unlikely case of a “major conflagration,” smartphone and tablet makers could face manufacturing issues, as they’ll have a hard time getting the much needed components from elsewhere, given that South Korean giants play a major role in the supply chain for said products.

Any type of manufacturing disruption of six months would prevent the shipment of hundreds of millions of mobile phones and tens of millions of PCs and media tablets.

South Korean companies are producing vast quantities of DRAM, NAND flash and tablet displays.

The components

Dynamic random access memory (DRAM) is used in computers, smartphones and tablets, with Samsung and SK Hynix bringing in a combined 66% of industry revenue in 2012. “Half of all global production” for DRAM comes from South Korea.

NAND flash (storage) memory, also found in various electronic devices including smartphones and tablets is also produced in large quantities in South Korea. Again, Samsung and SK Hynix are mentioned, having accounted for 48% of the industry revenue last year. Two-thirds of the world’s NAND flash supply comes from the region.

Finally, Samsung and LG are major players in the LCD display business, having shipped 49.6% “large-sized LCD panels” in Q4 2012, according to IHS. South Korea is responsible for 70% of the tablet display global supply.

Howard said that DRAM and/or NAND production “couldn’t be easily or quickly replaced” by companies in other regions, and while any short-term disruption “wouldn’t affect the display market as badly” – with production of said LCDs currently at a “high level” – it would still cripple the industry in case of longer disruptions.

The Android products

In addition to producing parts required for smarpthones and tablets, Samsung and LG are also important players in the mobile business, with the former estimated to ship over 320 million smartphones this year, and the later expected to sell around 50 million smartphones in 2013. Most of these smart devices would be Android-based. Furthermore Samsung also produces a significant number of Android tablets, with its models being among the popular Android tablets out there,according to a recent study.

While IHS focuses on supply concerns, we’ll also notice that a longer conflict would likely have an impact on other departments for these companies (R&D, marketing amont others), considering the vicinity of their headquarters to the border with North Korea. In a worst-case scenario the mobile industry could be even more seriously affected, with component shortages being just one piece of said puzzle.

Seoul, South Korea’s capital where Samsung and LG are headquartered, with SK Hynix also located close by, is only 30 miles away from the border with North Korea.

That said, such a conflagration in the Korean peninsula would have far greater effects in the world even though we’re only looking at what such a war would mean for smart gadget production right now, so we can only hope that we’ll never have to move past these extreme “what-ifs” scenarios for the region.

Source: androidauthority.com


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