Units of Intel Corp and Samsung Electronics Co are targeting to resume full operations of their Ho Chi Minh City plants by the end of next month, a move that could provide relief to global supply chains.
Saigon Hi-Tech Park is helping its tenants, many of which are running at about 70 percent capacity, to operate fully next month, park deputy manager Le Bich Loan said in a phone interview.
She did not elaborate on the steps the park is taking, particularly efforts at bringing back workers who fled to home provinces.
Photo: Bloomberg
The Ho Chi Minh City unit of Nidec Sankyo Corp, maker of magnetic card readers and micro motors, also expects to return to full operations late next month, Saigon Giai Phong newspaper reported, citing Loan.
The technology park is home to dozens of factories that produce components or services for global companies.
Representatives of Samsung, Intel and Nidec Sankyo did not immediately respond to requests for comment.
Many companies operating in Saigon Hi-Tech Park lost about 20 percent of their export orders in July and August, Loan was quoted as saying by Saigon Giai Phong.
COVID-19 infections surged in Vietnam during those months, prompting movement restrictions and, in some factory belts, government requirements to provide on-site sleeping arrangement for workers or shut down.
Samsung in July shut three of its 16 workshops in Saigon Hi-Tech, as it also reduced workers at its HCMC CE Complex by more than half.
Intel, which has a test and assembly plant in Saigon Hi-Tech, had its workers on a sleepover arrangement to avoid halting operations.
While small, Vietnam plays an out-sized role in the global consumer economy, supplying everything from Walmart Inc furniture and Adidas AG sneakers to Samsung smartphones.
After China, it is the second-largest supplier of clothes and shoes to the US, according to the American Apparel and Footwear Association. Its importance increased during the trade dispute between the US and China, as manufacturing moved there to avoid tariffs.
At this point, there is little brands like Nike Inc, which recently cut its sales forecast largely on the lack of goods from Vietnam, can do. Factories in other countries are overloaded with orders, and it would take months to train workers and move machinery.
The missed production would be especially apparent at retailers in December and extend well into the first quarter, said Camilo Lyon, an analyst for BTIG who projected that output from Vietnam would not return to normal until the middle of next year.
The full impact of this upheaval has not been priced into the stocks of apparel and footwear companies with big exposure to Vietnam, he said.
“The challenges are by no means over,” Lyon said.
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