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Coronavirus Affecting the Technology Industry

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Coronavirus Affecting the Technology Industry

According to the latest reports coming from Apple, Samsung and other Technology manufacturers with factories in China. With Coronavirus fears on the increase, Many Tech companies have been forced into either closing their factories or to limit the number of employee’s working at one time.

In the near future, this could result in drastically reduced stock due to reduced production. The virus has already caused major disruptions throughout the tech industry. But in the foreseeable future we expect it to get worse.

SupplyChain Coronavirus Report

Supply Chain TrendForce has published a report breaking down the effect’s the Coronavirus will have a certain industries in tech. Here is a quick breakdown by the Verge:

Smartphone production is projected to decline 12 percent year-on-year this quarter, which would make it the lowest quarter in five years. The supply chain is labor-intensive, so is being heavily hit by the postponement of work resumption, and there will also be shortages of upstream components like camera modules.

Several fiber optics suppliers are based in Wuhan, where the coronavirus outbreak originated, and together account for 25% of global production. China’s 5G rollout could be affected due to the greater need for optical fiber cables in next-generation base stations.

The DRAM and NAND flash markets are unlikely to be affected due to material stockpiling and a high level of automation at semiconductor fabs operated by companies like Samsung and SK Hynix.

Video game console manufacturing has been heavily hit, but next-generation production shouldn’t be impacted as long as the outbreak can be mitigated by the end of this quarter, since the PS5 and Xbox Series X will be launching in the holiday season. Current demand for the PS4 and Xbox One have already fallen due to anticipation of the upcoming machines. Meaning shortages of the current-gen machines are also unlikely.

Overall, TrendForce expects smartwatches, laptop PCs, and smart speakers to see the biggest decline in previous forecasts. Smartwatches are set to drop 16 percent from prior expectations, though the report notes that sales for wearable are usually much higher in the second half of the year when devices like the Apple Watch are updated.

Sam Byford – The Verge

It is a good reminder that Technology prices will likely increase drastically. It is therefor recommended that any IT purchases be made before prices skyrocket or after the Coronavirus situation improves.

If you or your Business need to have your IT solution’s looked at. Feel free to contact Techbug on 1300 655 121.

February 25th, 2020|