Several Taiwanese manufacturers in Vietnam have been struggling with production problems over the past few weeks, as the country’s south remains under a COVID-19 lockdown.
Pou Chen Corp (寶成工業), an original design manufacturer for international footwear brands, said that production at its factory in Ho Chi Minh City has ground to a halt, so it expects a significant drop in revenue at that factory from July to last month.
If the COVID-19 outbreak in southern Vietnam subsides in the fourth quarter of this year and employees are allowed to return to work, they might be able to put in some overtime, which would make up for the third-quarter losses, Pou Chen said.
Photo: Reuters
In the south of Vietnam, the government’s strict lockdown order was on Thursday last week extended for at least another two weeks.
An executive at Pou Chen’s Vietnamese subsidiary said that the company has been adhering to government regulations and has been trying to speed up the vaccination of its 100,000 workers in an effort to help curb the COVID-19 outbreak.
The subsidiary manufactures shoes not only in Ho Chi Minh City, but also in Dong Nai and Tay Ninh provinces in southeastern Vietnam, as well as Tien Giang Province in the south, the executive said.
Another Taiwanese contract footwear maker, Feng Tay Enterprises Co (豐泰企業), said production at its Vietnamese factories has been suspended for about two months.
Feng Tay said it had planned to reassign production to China, Indonesia and India, but its factories in those countries are almost at full capacity, so it has decided to wait until it is allowed to resume work in Vietnam.
Its clients are aware of the situation and are prepared to wait, the company added.
Fu Sheng Industrial Co (復盛應用), a Taiwanese company that makes golf club heads, said its production in Vietnam had been suspended since the end of July, but it was optimistic that the situation would gradually return to normal in the fourth quarter, as the vaccination rate in Vietnam has been rising.
Fu Sheng said it would boost production when the Vietnamese government lifts the lockdown.
Some production has been reassigned to China to make up for the losses in Vietnam, but that has been limited because its factories in China are almost at full capacity, the company said.
Demand for golf club heads is strong in Japan, South Korea and the US, Fu Sheng added.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to