One of the non-health-related but certainly predictable side-effects of China’s coronavirus outbreak has been component shortages – and, like the spread of the virus, they may get worse before they get better.
This has been noted by the press, particularly in India, where smartphone and consumer electronics companies are having to deal with potential production cuts and product launch delays.
According to local press reports, China accounts for an incredible 75 per cent of the total value of components used in Indian TVs and almost 85 per cent of those used in smartphones. This includes mobile displays, open cell TV panels, printed circuit boards, capacitors, memory and LED chips.
Not only are there shortages but Chinese component prices have gone up as much as three percent, given the still uncertain situation in China. Inevitably of course, it is expected that this rise will also be passed on to Indian consumers in the form of increased product prices.
The Chinese New Year holiday should have ended on 31 January, but in some Chinese cities it has been extended for as much as nine days.
In fact some media reports suggest that industrial activity in China has come to a standstill, and may be impacted further. Hong Kong, the main gateway to mainland China for freight and business, has suspended cross-border travel for now.
According to the BBC, the death toll from the coronavirus outbreak has risen to 170, and a confirmed case in Tibet means it has reached every region in mainland China. Chinese health authorities have been quoted as saying that there were 7,711 confirmed cases in the country as of 29 January.
It’s reasonable to assume that a number of countries’ consumer technology businesses will suffer, directly or indirectly, from the effects on productivity of this outbreak as contact with coronavirus sufferers is minimised. The only question is – for how long?
