Vietnam Faces Power Shortages, China Steps In? A Video Explaining the Chinese Power Grid

In May 2024, Vietnam has already entered summer. Insider sources reveal that Vietnamese officials have asked Apple’s supplier Foxconn to voluntarily reduce the electricity consumption of its six assembly plants in northern Vietnam by 30%. This is a precautionary measure after Foxconn experienced production halts due to power outages last year. In April, Apple CEO Tim Cook visited Vietnam and emphasized the importance of Vietnam’s role in Apple’s supply chain. Foxconn’s factories in Vietnam assemble Mac computers and iPads. With iPhone sales declining significantly, Apple’s revenue now heavily relies on computers and tablets. However, the risk of power shortages at this critical moment could severely impact Apple’s supply capabilities. Looking back to last summer, Vietnam experienced its most severe power shortage in history. Cities couldn’t afford to run air conditioners, and rural areas were plunged into darkness at night. The main cause of the power shortage was a sharp increase in electricity demand. Most regions in Vietnam are located in the tropics where high temperatures are common, but last year’s extreme heat was particularly intense. By June, Vietnam’s power system could not keep up with demand, and power cuts were implemented to ensure basic needs. Reports indicate that at the time, the Vietnamese power company required Foxconn to suspend production from dusk until midnight for 20 days, allowing production to resume from midnight to dawn. Although Foxconn managed to maintain normal operations, it was not operating at full capacity for a long period. Including factories from Samsung, Canon, Luxshare, and others, the World Bank estimated that power outages in northern Vietnam caused approximately $1.4 billion in losses last year, equivalent to 0.3% of Vietnam’s GDP.