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Coronavirus starts to trigger supply shortfalls and rising prices

As the reach and scale of the coronavirus crisis continues to grow so too will its impact on the global electronics industry.

Hundreds of electronics companies are located in the city of Wuhan, China, the epicentre of the current outbreak including the likes of Google, Avnet, Apple and Facebook and they could now be facing serious disruption to their supply chains.

The display industry is particularly vulnerable, with five factories in the city producing LCDs and OLED panels. Due to the virus there has been a significant near-term reduction in the global supply of panels used in liquid crystal display televisions and other products and analysts are suggesting that Chinese panel makers are expecting total capacity utilization for all LCD fabs in the country, to fall by as much as 20 per cent during February.

With China accounting for so much of the electronics industry, suppliers and purchasers will face a scramble to adjust to rapidly changing market conditions.

The full effects of the virus on the sector aren’t known yet, as many companies would have been closed anyway due to Lunar New Year Holidays in China, but many companies are going to have to start looking to gather information in order to deal with worker and production issues – both the telecoms and automotive sectors are vulnerable to possible supply disruptions.

The coronavirus has simply added another element to current global uncertainty and the longer it goes on, the greater the supply chain uncertainties will be across the entire electronics supply chain.

Neil Tyler

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