by Amy Leary, eBOM.com 12 March 2020
On March 11th, 2020, World Health Organization confirmed the Coronavirus a pandemic. A pandemic is the term used for a disease which is spreading between multiple people and counties at the same time. The last time a pandemic occurred was 2009 with swine flu, reported to have killed hundreds of thousands of people.
How is this affecting the electronics industry?
Electronics manufacturers anticipate at least a five-week product shipment delay from suppliers due to the coronavirus epidemic, according to a survey conducted by IPC, a global electronics manufacturing association. The group says shipping delays from China and other countries where the virus has spread are already having negative impacts on manufacturers. Roughly 65 percent of manufacturers report their suppliers expect, on average, a three-week delay. However, electronics manufacturers expect delays to be longer than what their suppliers are currently quoting. On average, executives expect shipment delays to be at least five weeks.
“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 and varied strains and disruptions.”
The virus is not only affecting companies within the industry, but also events. SEMICON Southeast Asia 2020 has been postponed from 12-14 May 2020 to 11-13 August 2020 due to concern surrounding the virus. “After close consultation with our stakeholders, which include partners, exhibitors, industry peers and the general community, we have made the necessary decision to postpone SEMICON Southeast Asia 2020,” said Bee Bee Ng, president of SEMI Southeast Asia.
How is the virus affecting the global economy?
The virus has already caused many knock-on effects for the global economy. From lengthy manufacturing time frames to fewer sales, there is global fear of the economy slowing down to a halt. According to City A.M, Bank of England governor Mark Carney has said the economic shock from coronavirus “could prove large” but sought to reassure the public that it will “ultimately be temporary”. Economic Times estimated that coronavirus could cost the world $1 trillion. The worrying prospect that the COVID-19 outbreak could become the first truly disruptive pandemic of the globalization era is renewing doubts over the stability of the world economy.
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 organizations have restricted travel along with home based working arrangements.
On the 11th March, Trump stated that he has suspended all travel from Europe to the US – excluding the UK. The travel ban has caused a huge plunge in the markets. Not only this, Wall Street is heading for another slump too – trading in futures contracts have been suspended ‘limit down’, after falling 5%.
Transportation to and from China is severely limited. With big airlines such as British Airways, Lion Air and Seoul Air cancelling all flights to Beijing and Shanghai, it would be very unlikely to travel to China smoothly. Even traveling to popular holiday destinations could be a struggle.
According to the BBC, a hotel in Tenerife in Spain’s Canary Islands has been locked down after a visiting Italian doctor tested positive for coronavirus. Hundreds of guests at the H10 Costa Adeje Palace Hotel were initially told to stay in their rooms as medical tests were carried out.
Let’s hear what the industry professionals have to say
SOS Electronic: “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.”
Mouser Electronics: “Regarding travels, we have restricted all travels to Asia and within Asia. 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.”
Digi Key: “At Digi-Key, our thoughts and prayers go out to everyone impacted by COVID-19 worldwide, and our primary concern is for the health and safety of our team members, customers and business partners. 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.”
Amy Leary is marketing manager for eBOM.com, am information resource for design engineers, procurement professionals and manufacturing and test engineers