As second wave of COVID-19 softens in India, electronics manufacturers are set to experience a setback in terms of supply chain as Vietnam, Taiwan and China have been hit by a fresh outbreak of the coronavirus.
Industry sources say that COVID-19 outbreak in Vietnam’s industrial northern provinces, where Apple, Samsung and other global tech firms located, has left factories operating below capacity. With areas entering lockdown, there are concerns about supply chain disruption.
According to Reuters, a factory which supplies to iPhone maker Apple, had split its workforce over two shifts as a temporary solution for two weeks, otherwise the supply chain will be more or less disrupted. Vietnam accounts for half of Samsung’s global phone and tablet production. Bac Ninh, where Samsung Electronics has significant operations, imposed a curfew and other restrictions. Last week, as per the report, the Vietnam government urged Bac Ninh and Bac Giang provinces to boost efforts to prevent a COVID-19 outbreak, disrupting industrial production, with LG, Foxconn and Luxshare have operations or supply chain companies in the area.
Hong Sun, vice chairman of the Korean Chamber of Business in Vietnam, told Reuters that some of the lower-tier vendors which supply South Korea’s major tech firms were struggling. “Small to medium-sized enterprises in Bac Ninh and Bac Giang provinces are finding it challenging to operate. It seems many Korean businesses, including 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.”
Taiwan has also been hit by fresh COVID-19 cases and this has challenged its chip industry. The nation’s Economic Affairs Minister Wang Mei-hua has encouraged the people to work from home and hinted that even if the government continues to raise its COVID alert, her ministry will make sure the crucial international supply chain keeps flowing. “Taiwan supplies semiconductors, information technology products and machinery goods to the world. It is crucial to keep manufacturing operating under a circumstance like this,” Wang said. “Companies need to react quickly if there’s one production line worker who has contracted the virus.”
To prevent major disruptions, tech companies like Foxconn are seeking to purchase COVID vaccines themselves in a bid to keep business running smoothly. Sources said the company would buy vaccines from overseas suppliers and use 10% for their employees while donating the reminder to the government.