Schmidt's men welcome a Wales side chasing an unprecedented third consecutive RBS 6 Nations crown and the Kiwi is well aware of the threat posed by last year's Player of the Championship.
Two years ago, when Declan Kidney was in charge, Ireland sunk to a 23-21 defeat after Halfpenny kicked a 79th-minute penalty, and Schmidt has told his players that the Wales full-back will punish any indiscretions.
"You're very conscious of him," said Schmidt.
"You're very conscious of conceding penalties in your own half too, though, because Rhys Priestland has a nice kicking game.
"The one thing I would say is that our discipline, over the four games we've played so far, has probably been better than anyone. We'd hope that would continue.
"It's something we are working incredibly hard on, even in training. If we see anyone that is off their feet or a half an inch offside, we are trying to pull them up straight away and keep that message coming in so we concede as few penalties as possible."
Ireland welcome back captain Paul O'Connell and centre Gordon D'Arcy but Schmidt admits that Sean O'Brien, who stepped in for Sam Warburton for the British & Irish Lions over the summer but who misses the Championship with a shoulder problem, will be sorely missed.
"We certainly miss Sean," he added. "But the one thing I would say, I thought Peter O'Mahony, Chris Henry and Jamie Heaslip all chipped in and added a little bit of value that covered for Sean last week in the win against Scotland."