Although 62 percent anticipate sales to be down for the year, a majority expect business to return to normal by summer 2020
BANNOCKBURN, Ill.— Electronics manufacturers continue to feel the impact of the coronavirus on their businesses. Companies experiencing supply disruptions report they expect five-week shipment delays on average. But a majority of electronics manufacturers and suppliers said they expect business operations to be “back to normal” by July 2020, and collectively, 75 percent of all respondents expect business to be back to normal by October 2020, according to an IPC survey on the impacts of coronavirus disruptions.
“Although manufacturers and suppliers continue to be hampered by the impacts of the coronavirus, most companies do not intend to make major cuts in capital expenditures, which suggests companies anticipate demand returning,” said John Mitchell, IPC president and CEO, in a release from IPC. “The delays will certainly impact sales for segments of electronics manufacturing, with consumer electronics likely to be the most impacted sector, followed by industrial and automotive.”
Most of the survey respondents reported they expect sales to decline in the first and second quarters of 2020 and for the entire 2020 calendar year as a whole. Roughly 56 percent of respondents said they expect sales to fall in the first quarter, 63 percent expect sales to decline in the second quarter, and 62 percent expect sales to be down for the calendar year 2020.
Roughly 69 percent of respondents reported being told by their suppliers that there will be delays in shipments due to COVID-19, and some delays are growing. Most respondents (55 percent) reported they are identifying alternative sources of inputs and cutting back business travel (54 percent). Nearly 30 percent of firms are encouraging teleworking where possible.
IPC (www.IPC.org) is a global industry association whose members represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly, and test. IPC surveyed its members—industry professionals at electronics manufacturing companies, including original equipment manufacturers (OEMs), electronics manufacturing services (EMS) companies, and printed circuit board (PCB) fabricators—for a second time between March 3 and 5, 2020, following an initial February survey.
Almost half of the survey respondents represent the contract electronics manufacturing services (EMS) industry. This segment performs an estimated 25 percent of North American electronics manufacturing for original equipment manufacturers (OEMs).