(Photo: Wikimedia Commons)
After Vietnam's nationwide electricity usage hit a record high in late April, the local government is concerned about a potential recurrence of power shortages. Authorities have requested businesses and enterprises to implement power-saving measures, including large foreign investments. Reportedly, the world's largest electronics contract manufacturer, Foxconn, has also received orders, hoping it can voluntarily reduce its electricity consumption by 30%.
As the world faces labor shortages, Vietnam, with its abundant young workforce, is considered the "world's next factory." However, during the summer of last year (2023), high temperatures combined with maintenance shutdowns at several coal-fired power plants led to widespread power cuts and outages in the northern region, causing losses of $1.4 billion. Despite repeated assurances from Vietnamese officials that such issues would not recur, preventive measures still seem inevitable.
Reuters, citing sources, reported that the Vietnamese government’s request to Foxconn was "an encouragement", not a requirement and ensuring that factory production would not be affected. Additionally, two other unnamed industry insiders noted that several other companies received similar requests.
Foxconn had received a similar power-saving order last year, coinciding with the mass exodus of multinational tech companies from China to Southeast Asian countries to mitigate the impact of the US-China trade war. Vietnam remains one of the top choices for these relocations. Currently, Foxconn operates six factories in Bac Giang province in northern Vietnam, where local authorities say these factories assemble Apple's MacBooks and iPads.
Apple, optimistic about emerging markets, has not only focused on expanding its facilities in India but also increased its suppliers in Vietnam by 40% to 35 companies within a year. During his visit to Vietnam in April, Apple CEO Tim Cook promised to further invest in the country's production base. However, this rapid expansion of foreign enterprises may have placed significant pressure on Vietnam's power and infrastructure.
On the other hand, Vietnam still relies on foreign investment to drive economic growth and has been actively attracting investments in high-energy-consuming industries such as semiconductors in recent years.
Following the power crisis, Vietnam implemented several remedial measures, including expanding electricity purchases from neighboring countries like Laos and reinforcing the power grid to facilitate north-south electricity transmission. However, these measures appear to be insufficient. Even with the country's proactive development of renewable energy and the anticipated increase in the share of wind and solar power, a special parliamentary supervisory team tasked with investigating the country's energy situation predicted that the power shortage issue could persist until 2050.
Source: Reuters、Vietnam News、Nikkei Asia、Apple Insider
