Electronics Manufacturers Feel Impact of Coronavirus Disruptions
A majority of electronics manufacturers and suppliers expect business operations to be “back to normal” by July 2020.
According to a recent IPC survey, electronics manufacturers continue to feel the impact of COVID-19 on their businesses. Companies experiencing supply disruptions report they expect five-week shipment delays on average. However, a majority of electronics manufacturers and suppliers expect business operations to be “back to normal” by July 2020, and 75% of all respondents expect business to be back to normal by October 2020.
“Although manufacturers and suppliers continue to be hampered by the impacts of the coronavirus, most companies do not intend to make major cuts in capital expenditures which suggests companies anticipate demand returning,” said John Mitchell, IPC president and CEO. “The delays will certainly impact sales for segments of electronics manufacturing, with consumer electronics likely to be the most impacted sector, followed by industrial and automotive.”
In addition, most respondents expect sales to decline in the first and second quarters of 2020, as well as for the 2020 calendar year as a whole. Roughly 56% of respondents expect sales to fall in the first quarter, 63% expect sales to decline in the second quarter, and 62% expect sales to be down for the calendar year 2020. Other key findings include:
- Nearly 40% of respondents report they are feeling worse about the impact of COVID-19 on their businesses than they were last month.
- Roughly 69% of respondents report being told by their suppliers that there will be delays in shipments due to COVID-19, and some delays are growing.
- Most respondents report they are identifying alternative sources of inputs (55%) and cutting back business travel (54%). Nearly 30% of firms are encouraging teleworking where possible.
- Roughly 26% of respondents expect to cut capital expenditures in 2020, while 63% report capital investment will remain the same.
IPC surveyed its members—industry professionals at electronics manufacturing companies, including OEMs, electronics manufacturing services (EMS) companies, and printed circuit board fabricators—for a second time between March 3-5, 2020, following an initial February survey. Almost half of the survey respondents represent the contract EMS industry. This segment performs an estimated 25% of North American electronics manufacturing for OEMs.
For more information, visit www.ipc.org.