Electronics manufacturers continue to feel the impact of the coronavirus on their businesses. Companies experiencing supply disruptions report they expect five-week shipment delays on average. But a majority of electronics manufacturers and suppliers expect business operations to be “back to normal” by July 2020, and collectively 75 percent of all respondents expect business to be back to normal by October 2020, according to a new IPC survey on the impacts of coronavirus disruptions.
“Although manufacturers and suppliers continue to be hampered by the impacts of the coronavirus, most companies do not intend to make major cuts in capital expenditures which suggests companies anticipate demand returning,” said John Mitchell, IPC president and CEO. “The delays will certainly impact sales for segments of electronics manufacturing, with consumer electronics likely to be the most impacted sector, followed by industrial and automotive.”
Additionally, most respondents expect sales to decline in the first and second quarters of 2020 and for the entire 2020 calendar year as a whole. Roughly 56 percent of respondents expect sales to fall in the first quarter, 63 percent expect sales to decline in the second quarter, and 62 percent expect sales to be down for the calendar year 2020.
Other key findings:
- Nearly 40 percent of respondents report they are feeling worse about the impact of COVID-19 on their businesses than they were last month.
- Roughly 69 percent of respondents report being told by their suppliers that there will be delays in shipments due to COVID-19, and some delays are growing.
- Most respondents report they are identifying alternative sources of inputs (55 percent) and cutting back business travel (54 percent). Nearly 30 percent of firms are encouraging teleworking where possible.
- Roughly 26 percent of respondents expect to cut capital expenditures in 2020, while 63 percent report capital investment will remain the same.
IPC surveyed its members – industry professionals at electronics manufacturing companies, including original equipment manufacturers (OEMs), electronics manufacturing services (EMS) companies, and printed circuit board (PCB) fabricators.— for a second time between March 3 and 5, 2020 following an initial February survey. Almost half of the survey respondents represent the contract electronics manufacturing services (EMS) industry. This segment performs an estimated 25 percent of North American electronics manufacturing for original equipment manufacturers (OEMs).