Tech Supply Chain Threatened With Disruption Due To Vietnam Coronavirus Outbreak

Factories located in Vietnam’s industrial northern provinces, where the units of suppliers of tech giants such as Apple, Samsung and other global tech firms are located, is operating below capacity because of a rapidly spreading Covid-19 outbreak there, said reports quoting industry sources.

Vietnam had been successful in containing the new coronavirus for the better part of last year. However currently it is facing a second wave of the pandemic which is facing faster than the first wave. Since late April this year, the virus has infected more than 3,000 people in 30 of its 63 cities and provinces.

Restaurants have been shut down and public gatherings have been banned in the country’s capital Hanoi, and the southern business hub of Ho Chi Minh City.

Lockdowns have been imposed in some areas which has affected the operations of some business – which in turn has raised concerns about disruption in a global supply chain, said reports quoting business sources.

One of the suppliers of Apple had distributed its workforce over two shifts, said reports quoting a source at the supplier, but added that the company sees this as a “temporary solution, for maybe two weeks.”

“Otherwise, the supply chain will be more or less disrupted,” the source reportedly told the news outlet.

Workers of factories in Bac Ninh and Bac Giang, the two provinces that have been the worst impacted by the latest outbreak, are being vaccine by the government, said Vietnam’s health ministry on Friday.

According to official data, one dose of Covid-19 vaccine has been administered to at least 1.04 million people in Vietnam but only 28,529 have been fully vaccinated.

According to the country’s state media, a curfew and other travel restrictions have been imposed in the province of Bac Ninh where there are significant operations of Samsung Electronics. According to the government about of Samsung’s global phone and tablet production takes place in Vietnam.

The local authorities of Bac Ninh and Bac Giang provinces were urged last week by the country’s government to boost efforts for preventing an outbreak of the pandemic which could disrupt industrial production. Operations or supply chains companies of LG, Foxconn and Luxshare are present in the area.

The workers of an electronic parts manufacturer in Bac Ninh were living and working within the industrial zones as the company had temporarily converted office space into worker accommodation claimed a report quoting a human resources manager of the company.

“We’re working on a longer-term plan too since we have no choice but to live with the virus,” said the manager, who was not named in the report. Chinese smartphone makers Xiaomi, Huawei, Vivo and Oppo are among the clients of the company.

The dual goals of virus containment and economic development will be followed by it, the Vietnam government has said. Four industrial parks that were closed a week ago because of the latest outbreak would be gradually reopened m the government said last Wednesday.

Production issues were being faced by some of the lower-tier vendors which are the suppliers for South Korea’s major tech firms, said Hong Sun, Vice Chairman of the Korean Chamber of Business in Vietnam.

“Small to medium-sized enterprises in Bac Ninh and Bac Giang provinces are finding it challenging to operate. It seems many Korean businesses, including big shots like Samsung, could face difficulties very soon if more stringent measures are applied,” Hong said. “First-tier suppliers are not yet heavily impacted, but certain factories are slowing-down and suffering from the fourth wave of COVID-19 in Vietnam.”

(Adapted from ChannelNewsAsia.com)



Categories: Economy & Finance, Entrepreneurship, Regulations & Legal, Strategy, Sustainability

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: