06/03/2020: Impact of Corona Virus on the World

With more than 95,000 people in 86 countries infected with Corona Virus and more than 3,200 people dead, we’ve come to point in time where panic cannot be evaded even though the ratio of the death to patients is 1:30. Global Market is heavily affected by the Corona Virus Outbreak, and giants like Samsung have called production to halt till the outbreak is in control. There is chaos in the Electronics Market with different categories reacting differently to the impact of the Corona Virus Outbreak on the Market.

China is at the epicenter of production and manufacturing for the entire global market. It is at the heart of all supply-chains. With COVID-19 emerging from China, factory shutdowns and mandatory quarantines in corona virus affected areas, have resulted in a panic situation across all the industries.

China, as we know, also imports raw materials on a large scale. Hence, commodity markets have consequently been impacted as well.

The electronics industry in India, which also, relies heavily on China ― the world’s second-largest economy ― for sub-assemblies, components and even full products, is on the edge of its seat, trying to fathom the effects COVID-19 is going to have on it.

Foxconn, the world’s biggest contract electronics manufacturer, said on that the China-based production should be back to normal levels before March ends, but also that it may not yet estimate how the outbreak is going to affect its full-year financial performance.

Apple has warned, that COVID-19 outbreaks would hit first-quarter revenues. However, chief executive Tim Cook told Fox Business Network last week that he was “very optimistic” about China getting the epidemic under control, adding that factories are slowly reopening.

What happens next will largely depend on how the Corona Virus crisis evolves. In the best-case scenario, the virus is going to be contained in a couple of weeks or will start slowing down in the early spring. People will resume work in China and industrial activity will pick up again. That should bring relief to the Chinese economy and the globe-spanning businesses that depend on it. The lagging demand will likely bounce back relatively quickly, particularly with the help of tailored government measures.

If the virus continues to spread across China, East Asia and other world regions, however, uncertainty and disruption will increase. Movement restrictions would continue and supply chains that are currently temporarily disrupted would decompose entirely, and factory shutdowns would inevitably follow, not just in China but also other markets. Some companies might consider revising their supply chains to find alternatives for China, but experience shows that that’s easier said than done.

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