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Corona virus: Outbreak, impact

Khubaib Ahmad

The world of mobile games is known for its rapid change, but the ongoing Covid-19 corona virus outbreak has affected it in unprecedented ways.

The report breaks its assessments down into individual components as well as product categories to provide a broad overview of the industry. It could also give some indication of what’s in store for individual companies like Apple. It’s worth reading the whole thing, but here are a few takeaways:

  • Smartphone production is projected to decline 12 percent year-on-year this quarter, which would make it the lowest quarter in five years. The supply chain is labor-intensive, so is being heavily hit by the postponement of work resumption, and there will also be shortages of upstream components like camera modules.
  • Several fiber optics suppliers are based in Wuhan, where the corona virus outbreak originated, and together account for 25% of global production. China’s 5G rollout could be affected due to the greater need for optical fiber cables in next-generation base stations.
  • The DRAM and NAND flash markets are unlikely to be affected due to material stockpiling and a high level of automation at semiconductor fabs operated by companies like Samsung and SK Hynix.
  • Video game console manufacturing has been heavily hit, but next-generation production shouldn’t be impacted as long as the outbreak can be mitigated by the end of this quarter, since the PS5 and Xbox Series X will be launching in the holiday season. Current demand for the PS4 and Xbox One have already fallen due to anticipation of the upcoming machines, meaning shortages of the current-gen machines are also unlikely.
  • Overall, Trend Force expects smart watches laptop PCs, and smart speakers to see the biggest decline in previous forecasts. Smart watches are set to drop 16 percent from prior expectations, though the report notes that sales for wearable are usually much higher in the second half of the year when devices like the Apple Watch are updated.


South korea

A Samsung factory in South Korea was shut down after a confirmed case of corona virus. The facility in Gumi, near the Southeastern city of Diego, was closed until early Monday morning and the floor on which the affected employee was working on will remain shut until early tomorrow.

“The company has placed colleagues who came in contact with the infected employee in self-quarantine and taken steps to have them tested for possible infection,” a spokesperson told Reuters. Although the Gumi factory is only responsible for a small portion of Samsung’s total device output – the majority of production takes place in India and Vietnam – it serves as an example of the potential disruption the corona virus could have on the mobile industry.

In China, there have so far been more than 77,000 confirmed cases of the virus, which is spreading to other countries. South Korea itself all reporting a major increase in cases over the weekend. With China being a major manufacturing hub and significant market there are concerns that the disruption could be significant. Many companies have instructed employees to work from home and to minimize travel, however the technology sector is viewed as a “critical” industry, exempt from many restrictions.

Foxconn, which is a key assembler for many major device manufacturers, hopes to resume 80 per cent production by March. Nonetheless, there could be a significant impact on China’s bid to be a leader in 5G. The country has made next-generation networks an economic priority, however rollout is being hampered by logistical and manufacturing issues – not least the deployment of fiber cables that support radio infrastructure.

Hawaii however has said the outbreak will not affect its ability to supply its customers with 5G equipment.

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