Crisis mode’: Coronavirus disrupts the heart of electronics manufacturing in China

The point being that the economic effects – world wide – will probably be worse than the medical effects of the bug.

  • Factories in China, the center of the electronics industry’s supply chain, are expected to reopen on Monday after being closed for an extended Lunar New Year holiday.
  • The date is being closely watched because Chinese manufacturing is critical to the electronics industry.
  • Given travel restrictions and potential supply-chain problems, products scheduled for the holiday season months away are at risk of being delayed as well, experts said

Factories in China, the center of the electronics industry’s supply chain, have been closed for an extended Lunar New Year holiday and the outbreak of the deadly coronavirus. Most are expected to reopen on Monday, a week later than scheduled.

But quarantines and other measures put in place to stop the spread of the disease in China could continue to disrupt electronics manufacturing well into the 2020 holiday season, even if factories quickly return to full production, manufacturing experts said.

Andre Neumann-Loreck, founder of On-Tap Consulting, a Silicon Valley firm that specializes in advising hardware companies and start-ups building products in Asia, said his clients have been asking a lot of questions about how to deal with the epidemic and have actively made contingency plans.

“Companies that are building hardware or physical products are in crisis mode now, and that’s true whether they’re getting finished goods built in China or relying on China for components and sub-assemblies,” Neumann-Loreck said.

For example, Facebook warned on Friday that it was expecting the coronavirus to impact the production of its Oculus Quest virtual reality headsets.

How delays could cascade

The supply chain has already been disrupted with the week-long delay to factories reopening, said Sherina Kamal, risk analyst at Resillience 360, a logistics risk-management company backed by DHL.

“The ripple effect coming from one region in China is completely unprecedented,” Kamal said. “We’ve never seen anything like this.”………..