The coronavirus outbreak is the main topic of conversation in the media and most companies right now. As the virus continues to spread around the globe, the health impacts and risks are on everyone’s minds.
I have read several interesting articles that examine the impact of the virus on the tech industry. One article posted on the DEVPRO Journal website indicates that the impact on the tech industry is just beginning. https://etccblog.com/2020/03/24/early-childhood-data-system-projects-lessons-learned-from-20-years-on-the-front-lines-2/
Business operations already have been affected, with conferences, business travel and even smaller gatherings being severely curtailed. However, the article notes that there is also going to be a big impact on production of hardware. The following is a list of specific segments of the technology industry that will be affected by the coronavirus outbreak:
- “Semiconductors: Because semiconductor production has a high degree of automation, this segment should be least impacted compared to many other industries. However, shipments could decline and, in turn, impact outsourced semiconductor assembly and test (OSAT) companies.
- Memory: In anticipation of the Lunar New Year holiday, companies were well-stocked on materials, so shortages are unlikely, as long as additional materials can be imported.
- Panels: Back-end module and downstream manufacturers and ODMs, production and prices are uncertain due to quarantines and labor shortages.
- Optical Communications: Of all global fiber optics production capacity, 25 percent is found in Wuhan, China, which is under quarantine, disrupting the optical fiber supply chain.
- IoT: Production continues now, but new products could be delayed due to stoppages in research and development.
- Wearables: Smartwatches, Bluetooth earphones and other wearables may see a decline in Q1 production due to labor and material shortages, and some new product releases may be delayed.
- Notebooks and LCD Monitors: Monitor set shipment is predicted to fall from previous predictions to 27.5 million. Notebook sets already see shortages or depleted stock of key components, which is projected to drastically decrease in predicted shipments from 35 million units to 30.7 million in Q1.
- Smartphones: First quarter smartphone production, which is highly labor-dependent, is expected to decline by 12 percent year-over-year to have the lowest output for a quarter in the past five years.”
Right now, we cannot predict the overall health and economic impact that will result from the coronavirus outbreak. However, it is clear that companies in the tech industry have justified concerns.
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