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Samsung announces global recall of Galaxy Note 7

South Korean tech giant Samsung Electronics said Friday it has decided to recall all of its new large-size Galaxy Note 7 smartphones that had rolled out in 10 nations, due to the recent explosions.

“We decided to stop selling Galaxy Note 7 and to replace all the products rolled out in 10 nations, including South Korea,” said Koh Dong-jin, the head of the company's mobile business, at the press briefing held in its headquarters in Seoul. It is the first time that Samsung has decided on a large-scale recall of its smartphones.

“We have produced around 2.5 million units so far and plan to recall all of them,” he said.

The chief cited a battery cell issue as the main reason for the explosions, without naming the battery supplier. 
Koh Dong-jin, the head of Samsung Electronics' mobile business, speaks at a press conference in Seoul on Friday. (Samsung Electronics)
Koh Dong-jin, the head of Samsung Electronics' mobile business, speaks at a press conference in Seoul on Friday. (Samsung Electronics)

“We are currently working with two or three battery-makers and the problem was found in only one of them,” he said. “There was a tiny problem in the process of manufacturing battery cells. Some issues related to ringing effects and insulation tape within cells appeared to cause the problem.”

Samsung plans to recall all Galaxy Note 7 units that used the battery from the problem battery-maker -- reportedly Samsung SDI -- in 10 nations. But, the company will continue to sell the smartphone in China, where the smartphone uses batteries from a different battery-maker -- reportedly a Chinese company.

The tech giant said it received 35 complaints regarding explosions at home and abroad as of Sept. 1, indicating the fault exists in 24 out of 1 million units.

Samsung Electronics’ much-anticipated Galaxy Note 7, which was first rolled out on Aug. 19 in South Korea, sold around 400,000 units in the nation and 600,000 units on the global market.

Samsung’s stock price declined 2.7 percent to 1,597,000 won ($1,427) on Friday from 1,641,000 won on Wednesday, following news reports about the explosions spreading on social media.

Samsung Electronics’ main battery supplier Samsung SDI also saw its stock price go down from 116,500 won to 108,500 won in the same period.

Hah Joon-doo, an analyst from Shinhan Investment Corp., said, “Battery explosions occur every year, but this is the first time that there are six to seven incidents within such a short period from the rollout,” calling it a worst-case scenario.

“Because of the explosion incidents, consumer sentiments will not be positive,” he added.

By Shin Ji-hye (shinjh@heraldcorp.com)

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