Vietnamese authorities have urged Apple’s supplier Foxconn to voluntarily slash power usage by at least 30 per cent at its assembly plants in the northern region, following electricity outages experienced last year.
The call for energy-saving measures, which reportedly extended to multiple manufacturers, is a precautionary step aimed at preventing a recurrence of the power shortages that resulted in significant economic losses last summer, estimated at over a billion dollars, as per a report by Reuters.
While the request to Foxconn, and other manufacturing units in the region was described as an “encouragement” rather than a mandatory directive, it has not affected production operations, as clarified by one of the sources.
Vietnam has become increasingly attractive to multinational companies seeking to diversify their manufacturing footprint away from China amid escalating trade tensions. Apple, for instance, has pledged additional investment in Vietnam, with its supplier count in the country rising from 25 to 35 over the past year.
As a Southeast Asian nation heavily reliant on foreign investment for economic growth, Vietnam has actively courted energy-intensive industries like semiconductor manufacturing. However, a heatwave last year triggered power shortages, causing significant disruptions to businesses in the northern region and resulting in substantial economic losses.
In response, Prime Minister Pham Minh Chinh has assured foreign investors that measures are being taken to prevent future power shortages. These efforts include deferring maintenance at coal-fired power plants to meet heightened electricity demand during peak periods, particularly in the hottest months.
While specific details regarding the timing and duration of the voluntary power reduction were not disclosed, one source mentioned that the request was open-ended.
Foxconn, renowned as the world’s largest contract electronics manufacturer operates several plants in northern Vietnam, including in Bac Giang province, where it assembles Apple MacBooks and iPads.
Provincial authorities, such as Bac Giang Power Company (BG PC), have issued statements urging industrial parks and enterprises to cooperate in implementing electricity-saving measures. BG PC emphasized that adjustments in power consumption and production plans could significantly impact the power system.
Despite variations in energy-saving measures across the country, authorities are taking proactive steps to address potential challenges, including boosting coal imports and promoting energy-saving practices, particularly among industrial sectors.
In March, foreign chambers of commerce advocated for government intervention to ensure a stable power supply, citing concerns from semiconductor companies about potential investment delays due to the risk of power shortages.
(With inputs from agencies)
