The reverberations from the novel coronavirus are staggering, with different industries and aspects of life being affected in unprecedented ways. Read on for expert opinions on how the virus is changing the electronics supply chain.
Daniel Foley
Table of Contents
For multiple reasons
I think that a lot more people are buying electronics during the pandemic, for multiple reasons. For those who do not have electronics and are now working from home, or trying to, they will need new equipment to be able to make this happen. I also think though that people are trying to find simplicity while they are at home, with more people buying gadgets to organise themselves or their homes. Amazon Echo or Google Home would be good examples of this. With everyone’s brains being fried by the state of the world, why not have a robot tell you when you need to take the dinner out?
Demand for electronics increased
Coronavirus affected the supply of electronics because since the pandemic has started, people are working from home and universities have opted for online classes so most people are in need of electronic devices in order to comply with these requirements. Therefore, the demand for electronics increased at an unbelievably fast rate so the production was not able to keep up at first making the supply for some electronic devices scarce due to very high demand. There are some phone units which are not available in malls and these include some laptops and tablets too.
Lewis Keegan
Laura Fuentes
Struggling to return to normal operations
Since early 2020, manufacturing rates have been dropping. Manufacturing plants, warehouses, and shipping companies began running at lower occupancy, creating a deficit in available supplies and electronics. Pair that with the uptick of remote working, virtual schooling, and virtual entertainment, the deficit became more extensive as more and more people required electronic tools at home. The global supply chain has been significantly disrupted and is struggling to return to normal operations.
Scarcity of labor
The electronic supply change was in stress even before the outbreak due to the political scenario between China and the US. Companies started shifting their operations to different countries like Vietnam AND Thailand. Analysts expected 2020 to be the year of recovery but unfortunately, it is a different picture now.
IPC (trade org dedicated to news and growth related to electronics) conducted a survey to understand the impacts. Here is what they found:
1. 69% of suppliers highlighted a shipping delay
2. 15% of delays were more than six weeks
3. Almost all of the executives were pessimistic
4. Consumer electronics were the most hit.
China reduced its manufacturing and output to other countries and also shut down some major productions. The output of the industry alone fell to its lowest level. Travel bans led to a regression in manufacturing utilization too. Then they started facing a scarcity of labor which curtailed their production even after some amount of freedom in the opening after the lockdown.