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According to the DRAMeXchange research division of TrendForce, despite the apparent slowdown of the COVID-19 outbreak in China, the virus is now rapidly multiplying across the Middle East, Europe, and the United States. Earlier, the World Health Organization declared the COVID-19 outbreak a pandemic, which poses dire, system-wide risks for the global economy. Similarly, the memory market may take a turn for the worse and go into a slump earlier than expected.
The smartphone supply chain is continuing to feel the effects of the COVID-19 outbreak. Owing to hindrances such as uneven factory work resumption statuses, a generally low rate of returning labor, and breaks in logistics and transportation, the supply chain has not been recovering as previously expected. The outbreak’s impact is projected to last 1-3 months, and the supply chain will not recover to normal levels until the second half of March at the earliest. Therefore, TrendForce is further reducing its previous projection of 1Q20 smartphone production from the pre-outbreak forecast of 307 million units to 270 million units, a 13.3% decrease YoY.
Under the impact of the COVID-19 outbreak, the notebook supply chain is facing many challenges in work resumption delays, labor shortages, material shortages, and logistic/transportation restrictions. TrendForce is hereby lowering its February notebook shipment forecast from 10.8 million units previously to 5.7 million units, a 47.6% decrease YoY.
The following analysis shows TrendForce’s investigations of key component and other downstream technology industries, under the impact of the COVID-19 outbreak, with the latest data as of February 14, 2020.
TrendForce’s latest investigation finds that several factors have negatively affected smartphone production: first, the labor-intensive nature of the smartphone industry; second, China’s delay in work resumption until February 10 and population movement control; finally, the reduction in the public’s willingness to buy. Due to the aforementioned factors, TrendForce is lowering its 1Q20 smartphone production forecast to a 12% decrease YoY, at 275 million units produced, which is a five-year low.
