Samsung to compensate suppliers | Business| Economy and finance news from a German perspective | DW | 18.10.2016
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Samsung to compensate suppliers

South Korean industry giant Samsung has announced it will compensate suppliers for costs related to the discontinued Galaxy Note 7 smartphone. Most beneficiaries of the move will be overseas.

Samsung Electronics said Tuesday it would compensate component suppliers for the discontinued Galaxy Note 7 smartphones and consider giving them orders for other models to cushion the blow.

The South Koreans said they would fully pay for unused Note 7 parts that had already been manufactured. They added they would also compensate suppliers for unfinished components and pay for materials bought to make Note 7 parts.

"Samsung will determine the inventory levels for the partner companies and carry out compensation quickly," the firm said in a statement without specifying just how much it expected to pay.

Ban during flights

Though most of the smartphones have been manufactured overseas, Samsung has also been a key customer for many domestic producers, prompting government and central bank officials to voice concerns about the wider economic impact of the Note 7 crisis.

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Samsung races to wrap up recall

The world's top smartphone maker last week permanently ended sales of the fire-prone Galaxy Note 7, less than two months after its launch.

Many airlines have since banned Note 7 phones from flights in response to numerous reports on the device catching fire.

The latest carriers to join were ANA and JAL of Japan. A Japan Airlines spokesman said travelers had been informed about the move, adding that passengers who did not stick to the ban would see their smartphones confiscated.

hg/jd (Reuters, AFP)


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