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      Corona virus Impact On Tech Industry Predicted In New                                   Report

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Corona virus impact on tech industry predicted in new report

Smartphones expected to decline, while video game consoles should be unaffected

By Sam Byford@345triangle Feb 18, 2020, 4:07am EST Share this story

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Supply-chain analytics provider Trend Force has issued a report assessing the likely impact of the 2019-nCoV outbreak on tech manufacturing. The corona virus has already caused major disruption throughout the tech industry, with huge trade shows cancelled and companies like Apple expecting to miss their forecasts.

The report breaks its assessments down into individual components as well as product categories to provide a broad overview of the industry. It could also give some indication of what’s in store for individual companies like Apple. It’s worth reading the whole thing, but here are a few takeaways:

Smartphone production is projected to decline 12 percent year-on-year this quarter, which would make it the lowest quarter in five years. The supply chain is labor-intensive, so is being heavily hit by the postponement of work resumption, and there will also be shortages of upstream components like camera modules.

Several fiber optics suppliers are based in Wuhan, where the corona virus outbreak originated, and together account for 25% of global production. China’s 5G rollout could be affected due to the greater need for optical fiber cables in next-generation base stations.

The DRAM and NAND flash markets are unlikely to be affected due to material stockpiling and a high level of automation at semiconductor fabs operated by companies like Samsung and SK Hynix.

Video game console manufacturing has been heavily hit, but next-generation production shouldn’t be impacted as long as the outbreak can be mitigated by the end of this quarter, since the PS5 and Xbox Series X will be launching in the holiday season. Current demand for the PS4 and Xbox One have already fallen due to anticipation of the upcoming machines, meaning shortages of the current-gen machines are also unlikely.

Overall, Trend Force expects smartwatches, laptop PCs, and smart speakers to see the biggest decline in previous forecasts. Smartwatches are set to drop 16 percent from prior expectations, though the report notes that sales for wearable are usually much higher in the second half of the year when devices like the Apple Watch are updated.

Here’s Trend Force’s updated forecasts for shipments in various device categories.

You can read the full report here.

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