The Effects of the Coronavirus on Electronics Manufacturing

First detected in Wuhan City, China, the coronavirus has infected tens of thousands of people and resulted in hundreds of fatalities. Officially named Coronavirus Disease 2019 (COVID-19), this respiratory illness can cause mild to severe symptoms and pass from person to person. Like similar illnesses, coronavirus poses a particular risks to older people and people with existing medical conditions.

The primary concern with coronavirus in China and around the world has to do with human life and well-being. That said, the outbreak has also had an impact on the electronics manufacturing industry. In 2015, China led the world in terms of manufacturing output. Although tariffs that began in 2018 have led some U.S. tech companies to move parts of their supply chains elsewhere, China still plays a central role in the production of consumer electronics.

Because the coronavirus has primarily affected China so far, electronic manufacturing has also been disrupted. Let’s consider some of the effects COVID-19 has had on production and explore what electronic companies can expect in the coming weeks and months.

COVID-19 and Electronic Manufacturing

After the coronavirus was detected in Hubei Province in December, many cities in China extended the Lunar New Year holiday by more than a week to help slow the spread of the disease. This delay meant that factories were not scheduled to resume operations until much later than usual, leading to noticeable delays for electronics manufacturers. 

The coronavirus will likely continue to impact output for days and weeks even after plants reopen. Delays can partly be attributed to the smaller returning workforce due to the outbreak. In a typical year, only 80-85% of a factory’s workforce returns after the Lunar New Year. Workers who decide to leave their jobs rather than risk disease exposure will likely lower this number further, and manufacturers will need to hire and train more new employees, compounding delays.

Impacts of Coronavirus on Electronic Companies

The situation in China and around the world is still evolving, so making certain predictions about the impacts of COVID-19 on the electronics industry proves challenging. However, companies in the U.S. and worldwide can expect and plan for these impacts:

  • Delayed development and production: Manufacturing delays in China mean that electronic companies can expect delays in development and production runs, especially if they rely exclusively on Chinese manufacturing companies. Delays may impact a company’s ability to develop a new product in time for the 2020 holiday shopping season.
  • Disjointed team efforts: Many major airlines have stopped flights to China in response to the outbreak, and travel from China to the U.S. is currently restricted. As a result, manufacturing and development teams may face challenges with collaboration. Development engineers will need to devise new, remote ways to support factories overseas.
  • Shipping problems: Travel restrictions will also likely lead to shipping problems and delays as air freight options become less available.

Adapting to the Coronavirus Outbreak

The challenges facing the electronics industry in the wake of the coronavirus outbreak are significant. However, delays are unavoidable in any crisis, and the measures restricting movement and factory operation promote public safety in China and around the world. Thanks to distributed supply chains, the electronic manufacturing industry is well-positioned to adapt to the impacts of the coronavirus. With creative problem solving, companies can overcome outbreak-related hurdles and improve their resiliency moving forward.

To remain competitive in a crisis, your company needs to stay aware of the latest manufacturing trends. For more electronics manufacturing advice and news, check out our blog or reach out to us. Global Electronic Services repairs pneumatics, hydraulics and industrial electronics for over 60,000 leading manufacturers and distributors.

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