North Korea: business as usual for IT supply chainPosted: April 12, 2013 Filed under: Uncategorized | Tags: channel, china, DRAM, flash, ict supply chain, korean war, LCD, north korea, Pyongyang, samsung Leave a comment
There’s a great deal of ambulance chasing that goes on in the IT press. Spot any major geopolitical news event and some vendor will try and shoehorn in a thinly veiled sales pitch for their products and services in the most blatant way possible.
There are certain events which do bear closer analysis, though, and I think the situation in North Korea is one of them. Given the impact of the earthquake and tsunami in Japan 2011 and the Thai floods of that same year, on the ICT supply chain, it’s clear that major events in Asia can have knock-on effects.
The major impact of a possible conflict in Korea would be on Samsung, which is the world’s largest supplier of LCD panels, Flash and DRAM and a major producer of lithium-ion batteries and chips. However, if China were brought into the conflict, this may also spread risk to the huge number of tech manufacturers in the People’s Republic.
So are suppliers getting twitchy? Are staff and assets being moved around to minimise risk? Are customers spending their money on cans of tinned food and bomb shelters rather than Galaxy Notes?
Well, as I reported in The Reg, none of that so far actually. The main message has been one of “business as usual”, with a caveat of continued monitoring of the situation.
“We didn’t observe any significant drop in consumer sentiment so far and don’t expect any major changes unless North Korea really launches a missile. There has been no big changes in Korea’s import, export and sales activity but tourism and foreign capital inflow could be impacted,” IDC analyst YoungSo Lee told me.
“The tension in Korea won’t ease that quickly and there are people who have started stocking up on daily necessities and even pulled out some money from the banks. There is talk of some foreign vendors making plans to send senior executives back to their home countries but there is no concrete evidence of that yet. All of the above are sensible precautions in response to continued uncertainty over how the crisis might develop.”
That said, just because there is widespread public apathy towards the kinds of threats being uttered daily by Pyongyang doesn’t mean nothing will happen – it only takes one piece of military or political misjudgement to spark a full-on confrontation which could impact IT channels.
“There are low expectations of anything serious happening, perhaps only a minor skirmish in disputed seas between the North and South,” Canalys APAC MD Rachel Lashford told me. “But of course low expectations does not mean that the risk is definitely zero.”
So, long story short – no panic yet, but worth keeping an eye on for future developments. One thing North Korea is not known for is it’s predictability.