The Effect of COVID-19 on the Electronics Industry

Prior to the onset of the COVID-19 pandemic, the electronics market was experiencing steady growth around the world. However, following the pandemic, the global electronics market has seen two major impacts. For one, the production facilities of electronics have been halted due to the logistical stoppages and lack of available workforce across the globe. Second, the majority of e-commerce companies around the world have limited the delivery of non-essential items (among which are electronics), effectively bringing the industry to a standstill. In this blog, we will take a deep look at the effects of the COVID-19 pandemic on the electronics industry.

 For the purposes of this blog, we will segment the electronics industry based on product type, application, and geography. In terms of product types, the market includes DRAM, SSD, MCP, processor, image sensor accessories, and more. Based on application, the market is grouped on the basis of automotive, communication equipment, enterprise systems, industrial, and personal electronics. Personal electronics has been the most heavily-affected segment. Lastly, the market is divided geographically into North America, Europe, Asia-Pacific, and the rest of the world.

As China was the initial epicenter of the disease, it has been hit particularly hard. However, in addition to China, major countries including the United States, Italy, France, Spain, Germany, and India were greatly affected by the pandemic, meaning their electronics industries felt the impact too. Research has suggested that two-thirds of U.S. businesses operating in China will experience a significant lowering of demand due to the lack of staff because of COVID-19. Sales have been further affected by the indefinite shutdown of retail locations, showrooms, supermarkets, etc.

The COVID pandemic has also disrupted global supply chain operations for many major brands. China, for example, is normally the largest producer and exporter of various electronics input supplies used to manufacture finished electronic goods. However, the ongoing production has forced North American and European electronics manufacturers to halt the production of goods or look for supply chain solutions elsewhere. As such, a gap in the demand and supply of electronic products has grown. Even massive companies have not been immune to the effects of the COVID-19 pandemic. Among some of the most significant companies affected by the pandemic are Apple Inc., Canon Inc., GoPro Inc., Hitachi Ltd., Huawei Technologies Co. Ltd., LG Electronics Inc., Nikon Corp., Panasonic Corp., Samsung Electronics Co., Ltd., Toshiba Corp., and many more.

So, what can be done? Major market players like the aforementioned companies are taking many different steps to reduce the negative effects of the crisis. For example, Apple delayed the launch of their newest iPhone model. The company also announced that they would not reach previously announced sales projections for the first quarter. Additionally, automotive manufacturers such as Hyundai, Nissan, and others, announced production suspension in their plants resulting from the delay of critical electronic parts. The COVID-19 pandemic has presented a broad range of unforeseen issues to many different industries. For many companies, how they deal with the pandemic will likely pave the way for the future of their operations.


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