The coronavirus outbreak is causing electronics manufacturers major pain and delays, as suppliers based in China are struggling to keep factories running at full speed
The coronavirus pandemic is causing worldwide havoc in every conceivable way, from stock markets plummeting to industries and economies suffering. Here in Australia, the Government has just announced that large congregations of people have been banned until further notice. This is an extremely radical and unprecedented step that will impact on sporting events, concerts, theaters, and just about every walk of life.
People here have been in panic mode, hoarding goods to the extent where many grocery store shelves are empty. Mainly, of all things, toilet paper… very strange. I’ve not seen anything like this in all my 74 years, not even during the terrible Asian Flu pandemic in the late 1950s or equally deadly Hong Kong Flu pandemic in the late 1960s. Coincidentally, both of these previous flu pandemics also originated in China.
Coronavirus’s Impact On Tech
Coronavirus’s impact on the supply and pricing of technology items is bound to be quick and hard felt. The web is already replete with dire headlines warning of shortages:
- PC sales suffer due to coronavirus
- Coronavirus upending the tech industry’s supply chain
- Coronavirus disrupts TV, laptop, and PC monitor production
These are just a few examples from pages of headlines. It’s a sad fact that the west relies heavily on imports from Asian countries. China, for example, is the world’s largest manufacturer of mobile phones, computers, and televisions and exports billions of dollars of goods every year. Even other tech manufacturing countries such as Korea, Vietnam, India, and Malaysia who have not been hit quite so hard by the coronavirus, still rely on parts manufactured in China.
As production in China grinds to a halt, with factories closing down left, right, and center, or at best working at an extremely diminished capacity, we can only expect to see more and more shortages of tech-related products and parts.
Coronavirus’s Impact On The Supply Chain
The breakdown of China-based electronics supply chains because of the coronavirus is delaying the arrival of computers and smartphones in shops, with experts warning that some companies are underestimating the impact of the disruption ~ Financial Times
Delivery times from overseas have exploded from the usual 3 or 4 weeks to, in many cases, months. According to one expert, smartphones, headphones, and computers are particularly exposed because retailers tend to already keep fewer of these items in stock as newer versions are released more frequently. Many electronics manufacturers based in the United States or Europe rely on components built by suppliers in China. IPC, a global electronics trade organization, ran a survey in February in which 65% of 150 participating electronics manufacturers and suppliers reported delays from suppliers due to the spread of coronavirus.
”I believe the worst is yet to come,” one manufacturer is quoted as saying. “The Chinese local government is fully overwhelmed with this process and could take weeks to get flushed out for factory production starting.”
Consumers may not feel the full impact of these shortages for a little while yet but, as stocks dwindle and the list of retailers awaiting fresh supplies increases, we can surely expect more and more empty shelves and even some smaller stores to perhaps shut up shop altogether. One thing for sure, the shortages are going to get a lot worse before the situation improves. Even when the suppliers become fully operational once more, it’s still going to take a long time for stock levels to catch up to anywhere near the norm.
Fears of a transportation bottleneck have arisen thanks to the outbreak. Scores of late shipments clogging shipping lines could stand to increase delays, even once factories are back online ~ IPC chief economist Shawn DuBravac
The delays will likely have ripple effects for the rest of the year. The longer China is affected by the epidemic, and the more it spreads to other parts of the world, the supply chain will experience more and varied strains and disruptions ~ IPC President and CEO John Mitchell
Apparently, Mr. DuBravac also asserted that he doesn’t anticipate any major impact on consumer goods and/or consumers. Far be it for me to disagree with an expert but I believe that to be an optimistic viewpoint.
Coronavirus’s Impact On Pricing
The law of supply and demand pretty much guarantees that prices for tech products are going to increase. Not only for tech products but probably across the board. My lovely wife went out this morning to do her weekly grocery shopping and reported immediately on her return that the prices of everything on the shelves have increased, some items more than others, but everything up in price. She also reported that there was still plenty of toilet paper available on the shelves.
Is it just me or is this inordinate hoarding of toilet paper weird? As far as I am aware, coronavirus does not cause diarrhea and there are many alternatives to clean oneself. If I were anticipating the possibility of forced quarantine for 14 days, my priority would be food and drink– certainly not toilet paper.
To be perfectly honest, I’m getting quite irritated by the constant news coverage on TV. The newsreader sitting there every evening with a wide-eyed look of wonder on his face as he declares that today there are even more confirmed coronavirus cases. No sh*t Sherlock. Both previous flu pandemics in my living memory lasted over 12 months with the Hong Kong flu pandemic lasting almost two years. With the massive increase in today’s population plus modern modes of transport, one would expect the coronavirus infection rates to be exponentially higher. We can but hope that the advancements in modern medicine since the last outbreak lead more quickly to a solution this time around.
On a final note– please beware of the scumbags who crawl out from under their rocks to take advantage of these types of situations to scam innocent and caring people. Stay well and stay safe.