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Qualcomm Among Most Vulnerable Companies If War Breaks Out Between North And South Korea

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Qualcomm Among Most Vulnerable Companies If War Breaks Out Between North And South Korea
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Tensions between the United States and North Korea remain elevated, and in theory, war could break out between North Korea, the United States and its allies — including South Korea.

If war were to break out in the Korean peninsula, QUALCOMM, Inc. (NASDAQ: QCOM) may be the most vulnerable based on a dollar amount,
Bloomberg reported. There are eight foreign companies that derive more than $1 billion of sales in South Korea with Qualcomm topping the list just shy of $4 billion.

Why Electroncis?

South Korea is a global hub for the electronics supply chain and Qualcomm's technologies are instrumental in building smartphones for South Korea-based Samsung Electronic (OTC: SSNLF), among many other companies. In fact, Qualcomm along with Applied Materials, Inc. (NASDAQ: AMAT) both derive around 17 percent of their total global sales from South Korea.

ASML Holding NV (ADR) (NASDAQ: ASML) is the most exposed to South Korea on a percentage basis as the European semiconductor-equipment maker derives around 25 percent of its total revenue from the Asian country.

It shouldn't necessarily be a surprise that the most exposed companies to South Korea are part of the electronics supply chain. But nearly every single sector would be impacted, ranging from consumer goods to even Starbucks Corporation (NASDAQ: SBUX), whose annual revenue was forecasted to break above 1 trillion won ($876 million) for the first time last year, Bloomberg added.

South Korea is also one of just five countries worldwide to boast more than 1,000 Starbucks stores.

"Essentially all companies doing business in South Korea are bearing with the uncertainty," Bloomberg Intelligence analyst Justin Jimenez noted. "It does cast a shadow and could filter through to investment decisions, hiring decisions."

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Image Credit: "North Korea Victory Day 2013" By Stefan Krasowski [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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