Intel and Samsung hope to resume full operations at their Ho Chi Minh City plants by the end of the month in order to help global supply chains.
In a phone interview, Saigon Hi-Tech Park deputy manager Le Bich Loan stated that the park is assisting its tenants, many of whom are only operating at 70 percent capacity so that they can resume full operations next month.
She didn’t go into detail about the park’s efforts to reintegrate workers who had fled the conflict and returned to their home provinces.
According to the Saigon Giai Phong newspaper, the Ho Chi Minh City unit of Nidec Sankyo Corp., which manufactures magnetic card readers and micro motors, expects to resume full operations by the end of the month, citing Loan.
In the technology park, dozens of factories manufacture components or provide services to multinational corporations.
Messages seeking comment were not immediately returned by Samsung, Intel, or Nidec Sankyo.
According to Loan, as cited by Saigon Giai Phong, many Saigon Hi-Tech Park companies lost about 20% of their export orders in July and August.
During those months, the number of infections in Vietnam increased by 19, prompting the government to issue mandates requiring workers to sleep on-site or shut down some factories.
In July, Samsung laid off more than half of its employees at the HCMC CE Complex and closed three of its 16 Saigon Hi-Tech workshops.
So that operations would not be disrupted, the Saigon Hi-Tech Intel test and assembly plant put its employees up for the night.
Despite its small size, Vietnam makes a significant contribution to the global consumer economy, supplying everything from Walmart Inc. furniture to Adidas AG sneakers to Samsung smartphones.
According to the American Apparel and Footwear Association, it is the second-largest supplier of clothing and footwear in the United States. As a result of the trade war between the United States and China, manufacturing has shifted to China in order to avoid tariffs.
Nike Inc., which recently reduced its sales forecast due to a lack of Vietnamese goods, has little to do at this point. Other countries’ factories are swamped with orders, and training new employees and relocating existing equipment would take months.
According to Camilo Lyon, a BTIG analyst, Vietnam’s output will not return to normal until the middle of next year, when it will be most visible at retailers in December and last well into the first quarter.
According to him, apparel and footwear companies with significant exposure to Vietnam have yet to fully price in the impact of this upheaval in their stock prices.
Lyon cautioned that the difficulties were far from over.