How China’s coronavirus outbreak is affecting tech...

How China’s coronavirus outbreak is affecting tech…

11th March 2020 By 0 Comments

The effects of COVID-19, or Coronavirus are extending beyond public health concerns and are having a huge impact on the technology we use on a daily basis. Supply chains in the high-tech electronics industry are beginning to suffer, and panic is starting to set in! With China at the heart of manufacturing globally, it only takes one small component being unavailable to bring an entire supply chain to a standstill. 

Tech companies such as Samsung, Google and Sony, which have moved their factories out of China in recent years, are being affected, as they still rely heavily on China for many components. Apple is one of the most high-profile companies affected, with its manufacturing partner Foxconn hitting a lengthy production delay, but they are far from alone, it is not just large businesses that will feel these effects. Many small businesses around the world also source products and parts from China.

For products and parts that are still being manufactured in China, new enhanced screening measures at all Chinese border crossings are likely to cause further delays. So the supply of these items is now uncertain and there are as yet no signs of the industry attempting to get back to any form of normality in the very near future – and with that in mind we should be asking, what is the long-term diagnosis for the coronavirus outbreak, and what will the economic symptoms be?

Shortages of high-tech goods

A vastly reduced amount of product on retailers’ shelves will soon be the case, with electronics stores expected to experience significant disruption to their supply of computers, televisions and smartphones. In circumstances like this the shortages affect the ability of customers being able to buy the products they want when they want them, any stock available is generally at an increased price due to demand. In the most extreme of cases, we may even see this leading to panic buying and stockpiling.

This is obviously a worry for many organisations, but could also be a period of new opportunity for others, as the world comes to terms with this latest global health crisis. Supply chains that are agile enough to react quicker than their competitors’, or those with more robust risk management plans, might find themselves gaining greater market share as a result of this crisis.

Store Closures

Last month, major tech companies including Apple, Samsung, Microsoft, Tesla, and Google announced they would temporarily shut down all corporate offices, manufacturing factories, and retail stores across China. Google has also closed offices in nearby Hong Kong and Taiwan. These companies include Apple, Samsung, Microsoft, Tesla, and Google, most of the closures were expected to be temporary, but so far there has been no notification of when exactly the offices would reopen.

As many products are manufactured in China (or use parts from Chinese vendors), experts are also warning customers to expect shortages for various smartphones, VR headsets, cars, and other tech accessories.

The coronavirus outbreak shows us anything at all, it is that what impacts China impacts everything!


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