Rising demand for electrricity due to information and communication technology (ICT) supply chain migration from China into Vietnam over the past few years is putting Vietnam in a conundrum — power supply shortages during the sweltering heat and drought season have started to force companies such as Foxconn to slow down their production in the Southeast Asian nation.
Sources quoted by the Wall Street Journal said Foxconn has been ordered by local officials to stop production from dusk to midnight, which are the peak hours for electricity demand. According to local government officials, the best-case scenario is that manufacturers must still be prepared for power shortages at least until late June, sources said.
Vietnam's national utility company Electricity of Vietnam (EVN) said the drought has made 11 hydraulic power plants unable to generate electricity for the time being, and thus blackouts will happen more frequently and probably will last longer in the next few weeks.
According to Vietnamese sources, Apple supplier Foxconn, Luxshare Precision, as well as Samsung Electronics factories located in northern Vietnam, hace received requests from the local power company, urging these operators to consider rotating power outages, or at least avoid producing during the peak hours to reduce electricity consumption.
At the same time, the authorities also allow some Foxconn factories to resume production between midnight and dawn. In this regard, sources said Foxconn's Vietnam plant is currently trying to maintain most of its production line operations, but the company is also considering building its own power generation system in 2024.
It is unclear whether Apple's production is affected. Neither Apple nor Foxconn has commented on the issue, and the Vietnamese Foreign Ministry has not responded to comments.
