Within the last five years the electronics industry has overcome endless obstacles such as Brexit, trade tariff wars, market changes and most recently, COVID19. However, I think we can all agree that the virus had the biggest most detrimental impact on the industry. COVID19 is a virus which is caused by severe acute respiratory syndrome and is shown to display symptoms between 6 and 41 days, with the most common being 14 days. The virus first broke out in Wuhan, China in December 2019 and has since spread to 180 countries. The electronics industry has hit hard due to the fact China is relied on as strong source for manufacturing. According to a recent survey from ECIA, it was recorded that serious disruption reports jumped from 17% to 26% and only 5% of members have seen no impact on their operations or workforce.
Events
Within the past six months, many events have been postponed or even cancelled due to the global virus outbreak. Many electronic industry events such as EDS, The Electronic Component Show, Mobile World Congress, Electronics Design Show, PCIM, Drives and Controls have cancelled for the safety of the visitors and exhibitors. Moving forward, there will be increased safety measures at large events including sanitisation and social distancing until we have a vaccine / cure for COVID19. In many areas at this rate, there will be very few events which physically take place in 2020 – if not none.
Manufacturing
China is known as the capital for manufacturing and supports many global companies due to its relatively low-cost production rates and high-quality products. According to South China Morning, Coronavirus originating in Wuhan has sent agriculture commodity prices tumbling and led to extended shutdown of Chinese factories and markets. A quote from PBS, the risk is that when the global supply chain is disrupted–most recently by the shuttering of factories due to the virus in China–many companies have few alternatives to fall back on. That is especially true of smaller and medium-sized companies that do not have operations in multiple countries. To solve this, some companies have announced they are shifting their operations to other countries, largely in Southeast Asia. An overwhelming majority (84 percent) of electronics manufacturers and suppliers are worried about the epidemic’s impact on their business operations. Delays in receiving supplier inputs can lead to factory downtime, higher average costs, transportation bottlenecks, pressure for alternative sourcing, delayed sales, and delayed prototyping that slows the introduction of new products. According to BBC, factory activity in China fell at a record rate in February, as manufacturers closed their operations to contain the spread of coronavirus. The country’s official measure of manufacturing activity – the Purchasing Manager’s Index (PMI) – dropped to 35.7 from 50 in January. It shows the virus is having a bigger impact than the financial crisis that shook the world last decade. “The delays will likely have ripple effects for the rest of the year,” said John Mitchell, IPC’s president and CEO. “The longer China is affected by the epidemic, and the more it spreads to other parts of the world, the supply chain will experience more and varied strains and disruptions.” Moving forward, we may have to adjust to not relying on only one manufacturing source.
Economy
ECIA’s Chief Analyst Dale Ford has posted the results of the 6th survey of members regarding their response to the Coronavirus / COVID-19 pandemic. This crisis has reached every corner of the world and significantly disrupted markets and supply chains in every country. (See Figure below) The extreme uncertainty and volatility associated with this crisis has created a need for visibility on how it is impacting the electronic components industry and the supply chain. To provide important visibility, ECIA began conducting surveys of member manufacturing and distributor companies at the start of February to gain an understanding of this ever-evolving situation. ECIA has published survey results on a bi-weekly basis to provide continuous updates to our members. To read the complete Survey Synopsis, please go to www.ecianow.org.
Within an article from IPC – electronics manufacturers anticipate at least a five-week product shipment delay from suppliers due to the coronavirus epidemic, according to a survey conducted by IPC, a global electronics manufacturing association. The group says shipping delays from China and other countries where the virus has spread are already having negative impacts on manufacturers. Roughly 65 percent of manufacturers report their suppliers expect, on average, a three-week delay. However, electronics manufacturers expect delays to be longer than what their suppliers are currently quoting. On average, executives expect shipment delays to be at least five weeks. “The delays will likely have ripple effects for the rest of the year,” said John Mitchell, IPC’s president and CEO. “The longer China is affected by the epidemic, and the more it spreads to other parts of the world, the supply chain will experience more and varied strains and disruptions.” The virus is not only affecting companies within the industry, but also events. SEMICON Southeast Asia 2020 has been postponed from 12-14 May 2020 to 11-13 August 2020 due to concern surrounding the virus. “After close consultation with our stakeholders, which include partners, exhibitors, industry peers and the general community, we have made the necessary decision to postpone SEMICON Southeast Asia 2020,” said Bee Bee Ng, president of SEMI Southeast Asia.
Job Market
Medical engineering is a high demanded job across the globe, especially now COVID19 is circulating the world. Moving forward, I believe the demand for medical engineers will increase drastically to prevent a pandemic like this happening again. According to Investopedia, China, Hong Kong, and the U.S. are at the front of the pack in producing electronics on a global level. Maintaining its reputation for producing inexpensive consumer goods in large quantities, China contributes heavily to the electronics sector, as this is the country’s most prominent export category. However, since China was where COVID19 first was formed, their reputation may have dropped significantly within the medial sector. There will be an increasing job demand for medical engineering to produce and design medical equipment such as artificial organs, ventilators, and robotic surgery. An artificial organ is a human made organ which is used as a replacement for a dysfunctional body part – such as a failed heart, lung replacement or disfigured limb. Artificial organs were created to lower the organ transplant waiting list and reduce casualties. According to the NHS, there are currently around 6,000 people on the UK Transplant Waiting List. Last year over 400 people died while waiting for a transplant. How do you make artificial organs? Over the years we have completed studies on stem cells which proves we may be able to grow organs in a lab. Within an article from Science Museum: Liver buds have been grown from human stem cells by scientists from Yokohama City University. These immature clumps of liver cells formed their own blood supply and matured into adult liver cells when transplanted into mice. In tests the cells showed some normal liver functions. This raises hope for the possibility of one day transplanting fully functioning lab-grown livers. On the other hand, artificial organs can also be produced using 3D printing which is potentially a more efficient way of creating an artificial organ. Smart electronics such as mobiles, smartwatches and tablets have been in high demand for many recent years. The ever-changing trend of smart devices means that electronic engineers will need to be adaptable to keep up with the latest trends. China is soon to overtake the United States as the largest economy in the world which would be widely contributed by talented electronic engineers.
Boris Johnsons Speech
On Sunday 10th May, Boris Johnson announced a ‘conditional plan’ which consists of lifting England’s coronavirus lockdown in small steps. In his address, Boris said people who could not work from home – including those in the manufacturing and construction industries – should return to the workplace but avoid public transport. Not only this, people will be allowed to take unlimited amounts of outdoor exercise, drive to other destinations to exercise, and play sports with household members from Wednesday 13th May. Boris stated that ‘we are taking the first careful steps to modify our measures’ which is planned to go through to July 2020. No earlier than 1st July, we could see some hospitality businesses open ‘if the numbers support it’ stated by Boris Johnson. Moving forward, in my opinion summer 2020 will be very restricted when it comes to meeting friends, going to hospitality events and abroad holidays will be written off.
By Amy Leary, Marketing Manager at eBOM.com
