Since the World Health Organization declared a Public Health Emergency of International Concern, the Chinese Coronavirus outbreak has rapidly spread and the electronics industry has been notably impacted. With over 71 thousand confirmed cases and over 1,700 lives lost, the novel Coronavirus, now officially named COVID-19, has and is continuing to cause mass disruption. You can click here to view an interactive heatmap of global confirmed cases by region.
Mandatory company shutdowns, decreased workforces and the extensions of the Lunar New Year holiday in China have affected the electronic and tech supply chains globally. Here’s what we know as of this writing:
- Though the extended Lunar New Year holiday has ended, many companies are still shutdown or are operating at a decreased capacity. Sensible Micro has received word that a few of our Chinese suppliers are still closed.
- Travel and transportation in mainland China has still been largely restricted or, in some cases, suspended. This has resulted in a stark drop of imports coming into major U.S. retail container ports this month.
- COVID-19 has caused disruptions to many electronic industry segments, including, but not limited to:
Automotive- International car sales are starting to fall and many prominent automotive manufacturers have stated that their production and sales have decreased significantly with some contemplating temporary plant shutdowns. Car sales in China are projected to fall by 15% this quarter and India’s auto production is likely to shrink by 8.3% in 2020 due to the outbreak. Additionally, Fiat-Chrysler, Hyundai Motor Group and Nissan all have publicly announced that selective temporary shutdowns are imminent, with some already beginning to suspend production.
Networking & Smartphones- Accounting for 27% market share in 2019, China is the world’s largest smartphone market. As a result, 5G networking and smartphone production are some of the hardest hit. Global smartphone production levels are estimated to fall 12% this quarter and, as stock of components, displays and popular smartphones like the iPhone 11 and 11 Pro run low, prices will likely increase across the board. 5G wireless technology is most at risk, as the outbreak began around the same time development started. According to research conducted by Omdia, "The global 5G value chain is projected to generate US$3.6 trillion in economic output worldwide by 2035. As a result, the stakes for players throughout the technology industry value chain couldn't be higher.”
Consumer Tech.- While all consumer tech and personal devices are likely to be affected by COVID-19, Apple’s AirPods are already experiencing issues. At the end of last year, Apple began to ramp up production of the wireless earbuds to keep up with demand. However, as the outbreak has spread, many of Apple’s major Chinese suppliers have had to halt all production.
Renewable energy, namely Solar- The solar industry in Korea, Taiwan and India is being impacted by the outbreak, as supply chain limitations and manufacturing delays are causing issues in both production and installation. Related issues with other forms of energy have yet to be announced but are not safe from the situation.
Many major electronic component manufacturers have facilities in China and are likely to be affected by the outbreak. Some have sent partners and customers official letters addressing the situation but have not publicly shared them. Manufacturers operating in China include, but are not limited to:
- TE Connectivity
- Sensata Technologies
Sensible Micro is continuing to monitor this situation. Shipping delays are expected to occur and we will do our best to mitigate any related issues. We will notify any affected customers with information on any disruptions as we receive them.