Samsung Suspends Shipments of Phones, Chips to Russia

The Samsung Galaxy S22, from left, S22 Ultra, and Galaxy S22+ Ultra 5G smartphones.
The Samsung Galaxy S22, from left, S22 Ultra, and Galaxy S22+ Ultra 5G smartphones.

amsung Electronics Co. said product shipments to Russia have been suspended due to current geopolitical developments, joining a growing list of companies from Apple Inc. to Microsoft Corp. that are halting sales and services in the country following its invasion of Ukraine last week.

The South Korean tech giant is actively monitoring the complex situation, the company said in an emailed statement to Bloomberg. Exports of all Samsung products ranging from chips to smartphones and consumer electronics have been suspended, according to a person familiar with the matter.

“Our thoughts are with everyone who has been impacted and our priority is to ensure the safety of all our employees and their families,” Samsung said in the statement. The company is donating $6 million, including $1 million in consumer electronics products, to humanitarian efforts in the region.

Tensions increased on Friday after Ukraine said that Russian forces attacked a nuclear power plant in the southeast part of the country, raising the stakes in the war and prompting calls for an even more robust response to the Kremlin’s aggression. The EU, U.S. and U.K. have compiled an extensive list of sanctions in an effort to isolate the country, financially, economically and technologically. Beyond concerns about the war, operating in Russia has become challenging for outside companies, given the sanctions, a U.S. ban on transactions with the country’s central bank and a precipitous decline in the ruble.

Microsoft on Friday condemned Russia’s “unjustified, unprovoked and unlawful invasion” of Ukraine and said it’s suspending all new sales of products and services in Russia. Apple has halted sales of iPhones and started limiting Apple Pay services and other popular products in Russia and removed the RT News and Sputnik News applications from App Stores outside the country. HP Inc., the largest supplier of PCs to Russia, has stopped exports to the country as has Intel Corp.

Suwon, Korea-based Samsung is the leading smartphone seller in Russia, with a market share that’s slightly above 30%. Smartphone sales in Russia account for about 4% of its global smartphone revenue. Semiconductor sales account for less than 0.1%, according to a report by Hana Financial Investment. Samsung also has a TV production plant in Kaluga, Russia.

Although South Korea has received an exemption from the U.S. export controls on Russia, the suspension of shipping channels and flights into the country would make it difficult for Korean companies to send products to the region anyway. Korean Air Lines Co. said on Friday that it would skip its cargo services to Moscow for two weeks, while ocean carrier HMM Co. halted bookings in and out of St. Petersburg.

The Korean government said last week that the war in Ukraine would have a limited impact on the economy in the short term as its trade exposure is minimal. But it warned that prolonged tensions could turn negative due to supply disruptions, uncertainties in financial market, and a slow economic recovery. Exports to Russia accounted for 1.5% of South Korea’s total exports last year, while imports totaled 2.8%, according to the finance ministry.