The Impact of Coronavirus on Electronic Manufacturing

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THE IMPACT OF CORONAVIRUS ON ELECTRONIC MANUFACTURING

The Impact of Coronavirus on Electronic Manufacturing

This article was last updated on Feb. 11th, 2020

These are the latest stats on the Coronavirus outbreak.

  • 43,101 Infected individuals
  • 7,345 of the infected individuals are in critical conditions
  • 1,018 Deaths
  • 4,043 individuals have recovered

The number of infected individuals and deaths has been increasing for the past weeks. Please take a look at these graphs from Worldometers.com

 

the_latest_stats_on_the_coronavirus

It then becomes easy to realize that the coronavirus outbreak is far from being under control. This outbreak is affecting the lives of millions of people in China, the same people that run the factories you get your products from.

Coronavirus Has Already Disrupted Electronics Manufacturing

 

Wuhan, the epicenter of the outbreak, is considered a crucial hub in the middle of China, a place of high importance for the production of automobiles, electronics, optics, and fiber optics.

 

Wuhan and surrounding cities in the Hubei province are currently on a government-imposed quarantine at a scale the world has never seen before, some Chinese officials have referred to the situation as warlike.

 

This is directly affecting the manufacturing of all kinds of products, including electronics, because many factories have had to shut down, and logistics has been crippled.

 

Even if factories reopen, it is uncertain whether they’ll be able to work at full capacity as many workers might not go back to work for fear of infection.

 

The ever more increasing lockdowns implemented by the Chinese government make it hard for workers to go back to work and logistics to function; roadblocks keep trucks on a standstill.

 

As of right now, 16 cities in Hubei province are on lockdown, bringing the number of people placed under quarantine to a total of 57,040,100. For the full list click here

 

To better illustrate how this epidemic is affecting the electronics world, here are statements made by big electronics companies.

 

  • Apple has already predicted delays on iPhone productions

 

  • Foxconn has not yet confirmed (as of September 10th) when will they reopen factories, Foxconn has stopped almost all of its production in China.

 

  • Sharp, Sony, and Nintendo have also announced delays in their productions.

 

  • Nintendo said the disruption in the production of the Switch console is inevitable.

 

  • Sharp has made a statement saying they could move production out of China entirely if the situation doesn’t get better shortly.

 

  • Electrolux, an electronics appliances manufacturer, has announced they’re in contingency mode.

 

  • Facebook is already expecting a delay in the production of its Oculus Quest Virtual Reality Headset.

 

  • Tesla’s factory in Shanghai has been ordered to shut down. Tesla is reviewing how the supply chain for its California plant will be affected.

 

  • AT&S, a major manufacturer of high-end printed circuit boards and substrates semiconductors, has said production in China is affected by the spread of the virus.

 

 

70% of All Smartphones Could be Affected by Coronavirus

 

Sony, one of the biggest manufacturers of camera sensors in the world, has made a statement saying the coronavirus outbreak will cause disruption in parts supply and manufacturing, and that such issue will have the most significant impact on smartphone sensors.

 

The Japanese Financial paper Nikkei reported that Sony warned investors that image sensors and related electronics could be enormously affected if the virus doesn’t slow down soon, this would directly affect companies the likes of Apple and  Huawei.

 

 

The Display Industry and the Coronavirus Outbreak

 

The display industry seems to be under much pressure right now. According to DSCC, Wuhan has become an essential center for display manufacturing. OLED and LCD factories either already in production or slated to start production in 2020.

 

DSCC projects Wuhan as accounting for 6% of worldwide mobile OLED capacity, 3% of mobile LCD capacity, and 2% of LCD TV capacity.

 

Display facilities in Wuhan, at the moment, are dealing with the genuine impacts of the coronavirus outbreak. These factories are going through shortages of labor and critical components as an outcome of actions designed to limit the disease’s spread.

 

In the mids of these challenges, top display suppliers in China have informed that a near-term production decline is unavoidable.

 

Displays production disruptions are expected to have a ripple effect on smartphone manufacturers.

 

When Will Manufacturing in China Go Back to Normal?

 

As of right now, no one knows, the new cases and death tolls keep on increasing as days go by, the Chinese Government keeps on tightening security in already lockdown cities, police force accompanied by medical teams are visiting people’s households and checking for anyone who might be sick and not reporting it.

 

As the number of deaths rises above 900, last digits reported on Feb 10th; a UN health agency has been sent to China to help investigate the Coronavirus epidemic

 

It is fair to say that as long as the situation doesn’t start seeing a definite improvement, it’s difficult for people to go back to work and act as if everything is okay, even if authorities decided to allow factories to open their doors again.

 

This first and foremost human crisis is proving to be a disruptor for not just electronics manufacturing but for many other industries that all together put the world’s economy at peril.

 

The scale of disruption in China is already unprecedented, Hyundai, the fifth-largest global carmaker, has closed its factories in Korea because of a lack of Chinese components, and crude prices are plummeting as the Chinese transport system is seeing a collapse and imports are down by 3-4 million barrels a day.

 

Does Taiwan see the Same Negative Effect in Electronics  Manufacturing?

 

The answer is no, while in China, many factories are still closed, in Taiwan the impact is minimal, making the island the number one China alternative for electronics manufacturing. If you’d like to read more about why Taiwan is one of the best choices for electronics manufacturing, please read this.

 

The latest data only reports 18 Coronavirus cases on the island. Businesses and schools are working as usual; people are being advised to wear protective masks and wash their hands regularly.

 

Manufacturing operations are working as usual, but possible component shortages will start to create disruptions in the activities.

 

Recommendations

 

There’s only so much you can do, now more than ever you should maintain close communication with your manufacturers and suppliers, they’ll be able to provide you with the latest information about what the landscape is looking like and this will allow you to take any necessary measures.

Eulises Quintero

Currently working as the content manager for TITOMA. With an extensive background in content marketing and a real interest in electronic products I'm able to produce some of the pieces of content you'll find here, all with the help of the TITOMA team of course. On my free time I like to travel, explore and work out.

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