Covid thumps semiconductors
Deloitte 20, Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms are legally separate and independent entities. “COVID-19: A Black Swan Event for the Semiconductor Industry,” https://www2.deloitte.com/content/dam/Deloitte/us/Documents/technology-media-telecommunications/us-tmt-covid-19-a-black-swan-event-for-the-semiconductor-industry.pdf
COVID-19 is having a large impact on both people and companies. As of mid-February, millions of people are under some degree of travel restriction across China.3 In addition, critical electronics manufacturing hubs were temporarily idled to limit COVID-19’s spread.4 This confluence of events is hitting the global supply chain, impacting both suppliers—via shortages of materials, components, and finished goods—and consumers—by creating reduced spending in China on semiconductor-dependent products (e.g., consumer electronics, automobiles).5
While there are different perspectives on how damaging COVID-19 will become, the fact remains COVID-19 is spreading across the globe. New cases have been reported in locations including, but not limited to, the United States of America, Canada, Europe, Africa, the Middle East, India, South Korea, Australia, and Japan.
Although the full impact of COVID-19 is still unknown, the impact across the electronics value chain, from materials to final products, will likely be far reaching—and hard hitting on those parties involved with semiconductor manufacturing. COVID-19 is highlighting the potential risks and vulnerability of today’s electronics and semiconductor value chain model and challenging the semiconductor industry to consider transforming its global supply chain model. COVID-19 might become the black swan event that forces the semiconductor industry to transform its global supply chain model.