Vietnamese officials have asked Apple supplier Foxconn to cut power use by 30% at its northern assembly plants to prevent last year’s electricity outages, according to sources.
This request, also sent to other manufacturers, is a precaution to avoid power shortages like those that caused over a billion dollars in lost output last summer. The request is voluntary and hasn’t affected production, a Reuters report claims.
Vietnam is attracting more multinational companies, diversifying from China amid US-China trade tensions. Apple, for example, increased its suppliers in Vietnam from 25 to 35 and promised more investment. The country relies on foreign investment for growth and aims to attract energy-heavy industries like semiconductor manufacturing.
Last year’s heatwave caused power shortages, disrupting businesses and costing $1.4 billion, or 0.3% of GDP, according to World Bank estimates. Prime Minister Pham Minh Chinh assured foreign investors that power shortages won’t happen again.
The government has asked coal power plants to delay maintenance to meet higher demand during the hottest months.
The sources didn’t specify who sent the requests, when Foxconn received it, or how long the cut would last. They spoke anonymously, as the matter isn’t public. Apple did not comment.
Foxconn, the world’s largest contract electronics manufacturer, has several plants in northern Vietnam, including in Bac Giang province, where it assembles Apple MacBooks and iPads. Bac Giang Power Company (BG PC) has asked industrial parks and authorities to implement electricity savings. BG PC stated that power load adjustments and energy savings by companies impact the power system.
Energy-saving measures vary by region, with some areas asking manufacturers to reduce power on certain days. Authorities have increased coal imports and encouraged energy-saving to avoid shortages. In March, foreign chambers of commerce urged the government to ensure power supply, noting that power supply risks have delayed semiconductor investments.