North Korea Concerns Could Affect Samsung

By George Kiriyama
|  Tuesday, Apr 9, 2013  |  Updated 6:10 AM PDT
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Samsung is based in South Korea and if North Korea were to attack South Korea, the impact could be felt worldwide. George Kiriyama reports.

Samsung is based in South Korea and if North Korea were to attack South Korea, the impact could be felt worldwide. George Kiriyama reports.

 We have Silicon Valley. South Korea has the Crystal Valley. And the crown jewel is Samsung's enormous production facility in the city of Tangjeong. It sits on more than a thousand acres. Sort of a mini-city complete with housing, parks and theaters. The facility makes liquid crystal displays, memory chips and cell phones.

But can you imagine what would happen if North Korea attacked South Korea? Close observers say that could be crippling.

"If in fact something like that did happen it would be devastating to the global economy," Philip Yun, a former senior member of the U.S. delegation for peace talks in North Korea, told an audience at the Commonwealth Club in San Francisco Monday night. "I think Asia would be quite affected. The shipping lanes would be affected. South Korea is a major player in the international economy and it's going to affect Japan and China as well so it would not be good."

 If Samsung's facility in Crystal Valley were hit, it would cause a ripple effect, hitting and affecting many tech companies worldwide.

"Samsung is one of the biggest suppliers of technology equipment in the world," Rob Enderle, a San Jose technology analyst, said.  "Lot of memory comes out from them. Screen technology from them. It would have a significant impact."

A significant impact on Silicon Valley companies like tech giant Apple. It buys $13 billion worth of technology from Samsung that goes into their iOS.  Verizon, Hewlett Packard, Dell and AT&T all depend on Samsung technology. And if the war were to spread beyond Korea would spell bad news.

"Any conflict there spilling over to Japan and Taiwan of course if that happens then you've got a major issue because even if the factories kept going, getting supplies outta there becomes an issue," Enderle said.

 And that could mean higher prices for smartphones, flatscreens and other technologies. Just getting the parts to plants and facilities around the world would be costly.

"Oil across the water. Materials across the water. All of those things become much more expensive. Wars have a significant impact on prices for things like fuel, gas...cause the military starts consuming it all," Enderle said.
 

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