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Take a deep breath: No NORKS panic for ICT supply chain … yet

Regional tech titans are keeping a close eye on situation

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It’s business as usual for the ICT supply chain in Asia despite heightened tensions on the Korean peninsula which have now seen the de facto closure of the symbolic Kaesŏng industrial zone, according to market watchers.

The Reg has had its ear to the ground across the region to see if the recent escalation in threatening rhetoric from Pyongyang has forced tech vendors to move key assets and staff away from high risk areas, or even begun to impact buying behaviour.

News agencies are reporting that NORKS workers didn’t show up this morning at the Kaesŏng park, a manufacturing enclave run by folks from the South, following an announcement on Monday that the North was temporarily closing the complex – the first time since it was established in 2004.

Commentators have warned the precedent could be an ominous one, given that Kaesŏng represents virtually the last symbol of cross-border co-operation between north and south, and a much-needed revenue source for Pyongyang.

South Korean workers have been barred from entering the complex, which sits a few miles inside North Korea, since last Wednesday.

However, tech firms in the region are viewing the latest developments at the complex, and NORKS’ continued threats to launch missiles against US military bases, as little more than the usual posturing that comes from the reclusive totalitarian state.

Min Cho, Korea-based senior industry analyst for Frost & Sullivan, told El Reg that the impact on the IT supply chain and the major technology vendors in the region is “not high as of now”.

“Although tension is growing, most large companies continue their business as usual,” she added.

“Leading IT companies such as Samsung and LG are just enhancing monitoring, in spite of increasing tensions. Most large companies think that the impact of the threat is not high currently. The evidence is that they are not shifting assets and cash or withdrawing their employees from South Korea.”

Rachel Lashford, APAC MD of Canalys, agreed that there’s been little impact on the industry as of yet.

“I doubt there is even an exodus of ex-pats from South Korea. It seems that periods of bluster and threats are common from North Korea, especially from a new leader wishing to establish himself on the global stage,” she told The Reg.

“Diplomats know this and are relatively calm. There are low expectations of anything serious happening, perhaps only a minor skirmish in disputed seas between the North and South. But of course low expectations does not mean that the risk is definitely zero.”

While there are no signs of an impending Norkocalypse yet, the pugnacious bluster from Pyongyang is only set to rise in the coming days with the birthday of founder Kim Il-Sung next Monday – a date which could see yet more US-baiting military exercises.

Yet previous rumours of an imminent nuclear test by NORKS have been dismissed, and as The Reg reported, it’s likely that Pyongyang’s missile capabilities have been greatly exaggerated. ®

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