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Covid-19 Is COVID-19 putting the future of the electronics industry in danger?

| Author / Editor: Luke James / Jochen Schwab

COVID-19 has seen many workers in tech-related roles carry out their work at home and the impact on the virus on China’s economy may cause long-term harm to the electronics industry.

COVID-19 has caused mass disruption to the electronics industry, but how will the Industry come back?
COVID-19 has caused mass disruption to the electronics industry, but how will the Industry come back?
(Source: gemeinfrei / Unsplash)

COVID-19 has caused mass disruption to the electronics industry. From supply chains halting to the cancellation of major industry events like Hannover Messe, these disruptions have thrown the electronics industry into a state of uncertainty and full recovery from them may take a long time to manifest, if they ever do.

Although these disruptions alone are not enough to assess the potential impact of the pandemic—something that even the world’s foremost economic minds are struggling with—we have already seen how China’s electronics industry has and is being disrupted, and to an extent how it has suffered, by and from extended lockdown measures. And if China, a country that efficiently implemented its lockdown measures, is seeing its industries suffer, it is safe to assume that similar will happen across Europe and the wider world.

It’s not all bad news

Some parts of the electronics and related industries are faring well, however, much better than others. For example, semiconductor and chip manufacturers involved in cloud computing have seen a surge in demand. This has been caused by a huge rise in the number of people going online. Never in our lifetime has the world seen such an aggressive global emergency and even the tech giants with all their resources have felt the strain.

Ookla, a company known by many as the provider of its broadband speed testing service, has been measuring the performance and quality of global mobile and broadband speed on a weekly basis. Their results show that since the COVID-19 outbreak started, many countries have experienced slower broadband speeds as huge numbers of traffic weigh down tech companies’ servers.

In contrast, other parts of the electronics industry, such as consumer electronics, and those closely intertwined with it, such as automotive, have seen a fall in demand for their products and services. It’s also not going well for all chipmakers, either.

An uncertain future

Despite modest growth, the electronics industry will undoubtedly start to see a downward trend as the COVID-19 pandemic and all the fallout from it takes its toll. A reduced workforce, the halting or slowing down of supply chains, and a fall in demand for electronic products and components are only some of the factors that will put a stop to the industry’s growth.

Not only that, but disruptions in China could cause a sort-of ripple effect for firms in Europe, too. This is because many manufacturers that rely on electronics input supplies from Chinse companies to finish their products simply will not be able to get their hands on them. This could lead to a short to mid-term fall in supply, causing further hardship for the industry as the gap between supply and demand widens.

However, we are still months away from beginning to see the impact that the COVID-19 pandemic has had on the electronics industry, and even then, analysis will be relatively limited. Only when all this is over will we start to see how the industry has really fared.

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