More Trouble for Supply Chains: Factory Closures in Vietnam

Samsung has suspended operation at 3 factories located in Vietnam as the virus continues to surge at Saigon's Hi-Tech Park.


Published July 15, 2021 - 3 Min Read

Samsung Electronics has closed 3 of its factories located in Ho Chi Minh City, Vietnam after 46 cases of COVID-19 were detected across the 3 factories. Additionally, the Korean electronics company has reduced its factory workforce to 3,000 from the original 7,000 workers.

Additional clusters of COVID have been detected at Ho Chi Minh City's Saigon Hi-Tech Park, with 700 cases detected at an unnamed factory, leading global supply chain analysts to voice their concerns about the potential effects of the factory closures.

One market analyst in Hanoi has said the shutdowns could stagnate global supply chains, particularly commercial goods and raw materials, in the 3rd quarter of 2021.

As of July 15, a total of 38,239 cases of COVID have been confirmed by Vietnam's Ministry of Health. According to sources from the Z2Data team, the current 7-day moving average of new cases is at a record high of 2,122, while a record high of daily new cases was reported on July 14 with a total of 2,934.

Source: Z2Data
Source: Z2Data

The question, for now, is whether or not the rise in cases is reaching its peak or if there is still a way to go before the summit is reached.

On July 6, just before cases started ramping up, reports surfaced of workers sleeping in factories in order to reduce potential viral exposure. It didn't work.

Tents on a factory's floor at the Van Trung Industrial Park in Bac Giang province. Source: Giang Son Dong
Tents on a factory's floor at the Van Trung Industrial Park in Bac Giang province. Source: Giang Son Dong

For Samsung, the goal right now is to isolate workers at the company to ensure safety from the viral load, while also continuing a functional production capacity. However, these plans offer no guaranteed protection from outbreaks, according to Nguyen Thanh Ha, Deputy Director of the Department of Health Environmental Management. The only true preventative measure against further outbreaks is suspended production at factories.

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