Report: Coronavirus causes drop in smartphone, laptop production

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Laptop market tanks due to coronavirus

Earlier this week, The Burn-In covered how the coronavirus pandemic is affecting the global component supply chain. Now, analytics firm TrendForce has offered new guidance regarding how COVID-19 will impact laptop and smartphone production and shipments this month and beyond.

TrendForce’s New Electronic Device Shipment Predictions

Previously, TrendForce offered a forecast that 35 million laptop computers would ship in the first quarter of this year. However, the organization made that prediction in a pre-coronavirus outbreak world. The firm has since revised its Q1 2020 forecast down to 27.5 million, a quarter-over-quarter decline of 35 percent, and an annual drop of 26 percent.

TrendForce explained that its new projections factor in production and logistics caused by COVID-19. The Chinese government mandated an extended work stoppage around the Lunar New Year. Though major electronics manufacturers like Foxconn have resumed production, they aren’t operating at full capacity.

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Another problem is that coronavirus-related anxiety has prompted significant labor shortages in factories, ports, and transport. Beijing has also established new checkpoints in the mainland, which have slowed down device deliveries. As a result, laptop manufacturers are having difficulties securing the materials they need and shipping their products.

The coronavirus outbreak has caused problems that extend into other facets of the global electronics industry.

TrendForce has offered new guidance regarding the production of smartphones. Before the outbreak occurred, the analyst firm predicted the sector would manufacture 307 million mobile devices in the first quarter. The organization has adjusted its outlook down to 270 million units made, a year-over-year decline of 13.3 percent.

The Burn-In recently highlighted how COVID-19 caused smartphone production delays in India and Vietnam. Dockworker and truck driver shortages in China have prompted New Delhi to investigate airlifting in handset components from its neighboring superpower. Samsung has taken to using air freight to get Sino made components to its Vietnamese factories.

Japanese video game company Nintendo is also dealing with operational disruption due to the outbreak. Because of material shortages, the company may have constrained the availability of its Switch consoles in the North American market come April.

Second-Half Turnaround

While laptop and smartphone manufacturers are dealing with supply chain problems right now, TrendFroce predicts a turnaround in the second half of the year.

The analyst organization notes that original device manufacturers (ODMs) typically see a surge in demand for educational-use Chromebooks in February. Though the pandemic has delayed that uptick in orders, it could occur in the third quarter. After all, students will need new devices as the 2020-21 school year begins this fall.

TrendFroce also sees an upswing for smartphone production and demand in the second half of the year. Foxconn announced its factories would be back at regular capacity by the end of March. That means the firm should be able to manufacture enough 5G-enabled handsets for the holiday quarter.

Apple plans to release three versions of its fifth-generation network compliant iPhones in the fall. Samsung supplier Qualcomm has also developed a line of 5G budget networking chips for use in the South Korean device makers 5G handsets. Even when figuring in the impact of the coronavirus, TrendForce forecasts global smartphone production of 1.35 billion units.

Although it’s difficult to imagine now, the COVID-19 pandemic’s impact on the global supply chain will subside. Eventually, laptop, smartphone, and other electronic device manufacturers will weather the storm and return to normal operations and prosperity.

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