Update (March 2,2020):
The Korea Centers for Disease Control (KCDC) said that as of February 27 afternoon, a spike in confirmed cases accumulated a total of 1,766 patients of the novel coronavirus infection in the country. The death toll added two new death totaling to 13 people.
President Moon Jae-in has already placed the country on “red alert” after it reported its fifth death on February 23. He said that the national and local governments should not hesitate to take “unprecedented powerful” to carry out its duty to contain the novel coronavirus.
Prime minister Chung Se-kyun cited the southeastern city of Daegu as the epicenter of the surge in virus transmission cases, declaring the city and the North Gyeongsang Province as “special management zones.”
Considering the fact that Chinese component manufacturing and production is critical to most technology companies, it does not come as a surprise that industry giants expressed their concern for the coronavirus (COVID-19) outbreak affecting their results early this year.
Changes in the tech industry late last year and early this year amid the virus outbreak could also have significant consequences in the global economy. The South Korean electronics and mobility giants also took a hit from the virus’ impact.
South Korean automotive industry giants such as Hyundai, Kia, GM Korea, SsangYong Motors halted production in some of their factories due to parts shortage as plants located in China stopped operation to prevent virus spread and contamination. However, due to less walking and commuting, there may be growth in private car sales.
Chipmakers, such as Samsung and SK Hynix, expected that the impact of the virus would only be limited to chip production due to preparations to ensure stable material supply and procurement. In fact, the companies’ memory plants in China operated without interruption even during the extended Lunar New Year holidays celebrated in China.
However, if the COVID-19 outbreak prolongs and worsens in China and Korea, chipmakers would worry about the impact of the situation on their workforce and the industry.
Increase in Online Services
On a more positive note, the use of artificial intelligence speakers, smartphones, and PCs increased in Korea amid the COVID-19 outbreak. Online grocery shopping and food delivery via AI speakers, such as Giga Genie, increased mostly due to consumers preferring to stay at home rather than going outside and fearing contamination.
Physical establishments such as stores and malls, witnessing a decline in customer presence. The resulting changes are likely to increase vacancy in shops and offices, and the real estate market.
There is also a chance for gaming services to grow. As more people stay at home, gaming platforms, such as KT’s platform, which increased by 14.8 percent since the spread, will become more accessible to keep consumers entertained.
Issues of the coronavirus also affected electronics conventions. The Mobile World Congress (MWC) 2020, less than a week after seeing withdrawals from exhibitors including LG, Amazon, and Sony, has been canceled. The cancellation would mean tech companies will need to promote or introduce their products in other ways.
In the past month, after reporting the first case of COVID-19 infection, South Korea has been witnessing a sudden rise in transmissions since February 19.
The cases increased rapidly, with the majority of the reports coming from the city of Daegu. On Friday, South Korean officials reported the country’s second death from the new coronavirus with over 200 confirmed cases.
The surge was due to a community transmission linked to the Shincheonji Church of Jesus and the Cheongdo Daenam hospital in Daegu.
The Shincheonji Church of Jesus, which is considered to be the center of the virus outbreak, is a religious sect believed to be heretical by mainstream Christian churches.
South Korean President Moon Jae-in on Friday ordered an inspection of the events related to the church to track the COVID-19 outbreak.
At a briefing on the same day, Prime Minister Chung Se-kyun, declared the city of Daegu and the North Gyeongsang Province as “special management zones,” after a 61-year old woman from the Shincheonji Church tripled the national infection tally.
The COVID-19 outbreak in South Korea could significantly weaken the economy if preventive measures are not implemented. The spread would also lead to an increased unemployment rate and currency deflation.
South Korea should be careful if it hopes to regain control of the situation and eradicate the virus quickly.