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The impact of the Coronavirus on the electronics industry

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Year 2020 has proven an unprecedented year so far: From Australian bushfires and floods in England, to climate emergencies and US trade tariffs, the start of the decade hasn’t been very positive. Not only this, within the last few months the world has been gripped by a deadly virus – Coronavirus, or Covid-19.

The virus first broke out in Wuhan late December 2019, and then spread like wildfire – causing almost 4,700 casualties in less than three months. The virus has now been confirmed in over 116 countries, infecting over 126,430 people worldwide and killed in the hundreds.

The electronics industry and coronavirus

Not only on people, but the virus has a major effect on businesses too. The global electronics manufacturing association, IPC, states that electronics manufacturers anticipate at least five-week product shipment delays from suppliers due to this virus – compared to the expected three-week delays.

“At this time, we have not detected any specific interruptions within our supply chain. However, delivery dates for certain products may ultimately be affected in the future. Therefore, we cannot guarantee them with certainty, and we encourage customers to place new orders in time to avoid coronavirus problems that may affect their business,” SOS Electronic issued a statement.

Whereas, global distributor Digi Key said: “Our business model positions us with substantial inventory to offer minimal disruption to our customers, and we have worked closely with our multiple carrier partners to mitigate impact on cargo plans. We’re providing updates and FAQs on our website for our customers and we’re in constant communication with our suppliers.

Shipping delays from China and other countries are already having negative impacts on manufacturers, however.

“The delays will likely have ripple effects for the rest of the year,” said John Mitchell, IPC’s president and CEO. “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 disruptions.”

The virus is also affecting business meetings, exhibitions and other events. After a series of closures, including the Mobile World Congress 2020 in February, now SEMICON Southeast Asia 2020 has been postponed from 12-14 May 2020 to 11-13 August 2020 due to concerns surrounding the virus.

The global economy and coronavirus

The virus has already caused many knock-on effects for the global economy. From lengthening manufacturing timeframes to fewer sales, there is fear that the global economy might grind to a halt. The Economic Times claims coronavirus could cost world $1 trillion. The worrying prospect that the Covid-19 outbreak could become the first truly disruptive pandemic of the globalisation era is renewing doubts over the stability of the world economy. Wall Street is heading for another slump too – trading in futures contracts have been suspended ‘limit down’, after falling 5%. And yesterday (12th March, 2020) FTSE100 has suffered its biggest loss since 1987.

Many workers are already facing disruptions to their daily routines as schools, companies and local governments implement precautions to curb the coronavirus outbreak. Already, many organisations have restricted travel along with home-based working arrangements.

On the 11th March, US president Trump stated that he has suspended all travel from Europe to the US – excluding UK. The travel ban has caused a huge plunge in the markets.

“We have restricted all travels to Asia and within Asia,” Mouser Electronics wrote in a statement. “We have recently also stopped all travels to Italy and are limiting all other travels to Europe, within Europe and to/from USA. It is highly likely that we will see very few people flying for at least the next month, unless exceptional circumstances, and we see the same from most of our supplier partners. As the situation changes, we will review this. We have ensured all offices globally have masks available as well as sanitiser to clean hands plus re-emphasising good hygiene rules.”

By Amy Leary, Marketing Manager, eBOM.com

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