Quarantines and other measures put in place to stop the spread of the deadly coronavirus in China could continue to disrupt electronics manufacturing even after factories return to production, manufacturing experts said.
Factories in China, the center of the electronics industry's supply chain, have been closed for an extended Lunar New Year holiday and are expected to re-open on January 10
Apple CEO Tim Cook attends the annual session of China Development Forum 2018 at the Diaoyutai State Guesthouse in Beijing, China March 26, 2018.Factories in China, the center of the electronics industry's supply chain, have been closed for an extended Lunar New Year holiday and the outbreak of the deadly coronavirus. Most are expected to re-open on February 10, a week later than previously scheduled.
"The ripple effect coming from one region in China is completely unprecedented," Kamal said. "We've never seen anything like this." Well-run companies typically have plans for production disruptions, and if companies have identified second suppliers for key parts, they may be able to keep producing current products at a slightly slower pace, said Swaminathan.Chinese workers assemble electronic components at the Taiwanese technology giant Foxconn's factory in Shenzhen, China.
First, a company builds a small quantity, or what's called an engineering verification test or EVT build, where the major features and components are tested and corrected. Then comes the design or development verification test, or DVT, used to make sure the devices can be built in large quantities. After that comes production verification tests, and finally "ramp," when factories are making large quantities of the product for the public.
"Our latest survey indicates that the iPhone supply is being affected by the coronavirus and, therefore, we cut the iPhone shipment forecasts by 10%," TF Securities analyst Ming-Chi Kuo wrote in a February 2 note. He said second quarter shipments were difficult to predict because of "the uncertainties of the coronavirus epidemic and consumer confidence."
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