What kind of impact is coronavirus having on smaller companies around the world? Here’s one view from an electronics components distributor supplying high-reliability components
While we hear much about the impact of coronavirus on the larger companies servicing high volume consumer markets, what about the impact on supply chain for the many other companies that are not major consumer brands? What are their containment strategies, and what do they see on the ground?
Around the corner from me is a global electronics components distribution, design and supply chain services company called Astute Electronics. Headquartered in Stevenage, UK, and employing around 180 staff in nine countries, including two warehousing and distribution sites in the U.S., its focus is on high mix, low volume customers in the aerospace, military, industrial, oil and gas, and markets requiring high-reliability devices.
Aran Coker, the international business director at Astute Electronics, told EE Times that staff at their office in Shanghai have been mandated to work from home, as per government guidelines. The company has also restricted travel and has had to cancel its annual Q1 sales conference due to take place in Singapore.
I asked about the impact of coronavirus on its business. Coker said it is too early to be specific about the impact. Right now, a surplus of inventory means there’s relatively little impact in terms of supply to its customers. However, there is likely to be an impact on the supply side, and bare PCB production and metal prices have been impacted. He cited industry anecdotes suggesting the automotive supply chain being affected in a big way, and the declining output of Apple iPhones. Indeed, according to reports, Trendforce estimates that iPhone production could be down by 10% to 41 million in the three months to March.
He said however, the main impact on the supply chain will be when China is up and running again. Coker commented, “The increased production will then filter through the supply chain and then we’ll be able to see where the gaps and real impact are. For example, with MLCC capacitors — the large volume industries will be first in the queue for supplies, and that will impact industries like ours that are lower volume applications for high reliability components.”