Vietnam Nears 10,000 Daily COVID-19 Cases... Global Supply Chain Impact

Nike Faces Shortage Concerns on Some Items
Adidas Warns of 3-Month Order Delays
Samsung Electronics Continues to Experience Smartphone Manufacturing Disruptions

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Hyun-woo] Vietnam's daily new COVID-19 cases are approaching 10,000, raising concerns over prolonged lockdown measures and their impact on the global supply chain. In particular, the closure of factories in Ho Chi Minh City, where global IT companies such as Samsung Electronics and Intel, as well as footwear and apparel OEM factories, are concentrated, has lasted for over a month, raising the possibility of shortages in some products.

On the 8th (local time), the Vietnamese Ministry of Health announced that the number of COVID-19 cases nationwide reached a record high of 9,690. This is an increase of 2,356 cases compared to the previous day's 7,334. Among these, Ho Chi Minh City, a major industrial hub, recorded 3,898 cases, accounting for more than 40% of the total. Vietnam's COVID-19 cases began to surge from April due to the spread of the Delta variant and have been fluctuating between 8,000 and 9,000 cases since last month.

Ho Chi Minh City ordered the suspension of all businesses and factory operations except for essential services such as banks, hospitals, and supermarkets on the 9th of last month. Since the 25th of last month, a curfew has been imposed from 6 p.m. to 6 a.m. the following day, prohibiting all citizens from going out. The Ho Chi Minh City health authorities announced on the 1st of this month that the lockdown measures implemented last month would be extended for two weeks, with the possibility of further extensions being raised.

[Image source=AP Yonhap News]

The impact on the apparel and footwear manufacturing industries is particularly severe. Major OEM suppliers for Nike in Vietnam, such as Korea's Changshin Vietnam and Taiwan's Pou Chen, have suspended operations since the 14th of last month. According to U.S. market research firm S&P Global Market Intelligence, 49% of Nike footwear imported into the U.S. is produced in Vietnam, raising concerns about short-term shortages of certain products.

Adidas, which relies on Vietnam for 28% of its total footwear production, is also on alert. According to CNBC, Adidas fears that if the factory closures in Vietnam continue for a long time, production delays of at least 3 to 4 months will occur in fulfilling existing orders. In this case, sales losses of up to 500 million euros (approximately 673.7 billion KRW) are expected by the end of the year.

The prolonged suspension of operations at OEM factories concentrated in Ho Chi Minh City is also ongoing. According to major foreign media, Samsung Electronics is experiencing disruptions in smartphone manufacturing due to the shutdown of local injection molding equipment suppliers in Vietnam. The operating rate of Samsung Electronics suppliers' factories in the Ho Chi Minh City area is reportedly at half the usual level. A Samsung Electronics official stated, "We expect operations to normalize within this month."

This content was produced with the assistance of AI translation services.