As the Summer comes to an end, it’s evident that the impact from Covid-19 on the supply chain isn’t over.
As a new variant sweeps across the U.S., new lockdown measures are being put into place, the long-term impacts of the pandemic are becoming more apparent, and the electronics manufacturing market continues to shift and change. From market growth to disruptions in manufacturing, the electronics industry strives to keep up with the new developments.
Integrated Circuit Insights: Unit Shipment Surge and Market Growth
The lockdown and pandemic as a whole certainly caused many issues for the electronics industry. However, some sectors were able to experience growth and reach new benchmarks. As a result of the lockdown, consumer electronics were in more demand than ever. Suddenly, game consoles, cars, and other items are hard to come by. The demand for these items, in turn, has significantly increased the demand for electronic components. After 2019 brought a 6 percent drop and 2020 an 8 percent increase in Integrated Circuit unit shipments, many forecast that 2021 will bring a surprising increase. Integrated Circuit has projected to see a 21 percent increase in shipments for the year, the largest increase since 2010.
New Covid Lockdown Restrictions are Disrupting Manufacturing
South-east Asia is a crucial part of the supply chain. The supply chain is expecting another hit due to the area being blindsided by a massive increase in Covid-19 cases. Unfortunately, many regions are dealing with the biggest spike in cases they’ve seen since the beginning of the pandemic. This is creating many ripples in manufacturing and, as a result, the supply chain as well. Semiconductors are especially experiencing issues.
Malaysia, home to over 50 fabrication plants, is one area where lockdowns are putting tension on the supply chain. Additionally, the area hosts many packaging and testing facilities that work with semiconductors and other electronic components. On August 4th, Malaysia marked record high cases of Covid-19 infections. The prolonged lockdowns, put in place to combat the rising Covid-19 numbers, have resulted in disruptions for many sectors, including medical, automotive, semiconductors, and more.
This disruption comes when the market has already been strained due to the global supply shortage. In Thailand, some factories are having to stop production and delivery temporarily. Despite this, TNSC president, Chaichan Chareonsuk, said he expects the minimum impact on total exports in the short term. Containment measures are expected to last at least until the end of August. This is the biggest outbreak that Thailand has dealt with to date. In the Philippines, semiconductor manufacturers Murata, Samsung, NXP, and others will be affected by the upcoming lockdown, which will begin on August 6th and is estimated to last at least two weeks.
Global Shortage Now Projected to Last until 2023
Although many businesses, restaurants, schools, and other places have been able to go back to “life as normal,” the supply chain is still feeling the impacts and slowdown due to the last year. There have been many speculations on when the global shortage will end. At this point, the shortage is projected to last until 2023. Glen O’Donnell, a vice president research director at Forrester, says that demand for semiconductors will stay high, but supply will still be limited. He argues this could cause the shortage to continue into 2022 or even 2023. As the industry shifts to meet the current demands and make up for gaps, many are anxious to reach a new normal.
Though the push and pull of the current global situation, the electronics manufacturing industry shows resilience despite the many obstacles of the last year. The demand for consumer electronics, automobiles, and other devices has driven an alarming increase in sales.
Although this year is projected to be one of the most successful years in terms of numbers for some sectors, it has not come without its fair share of hurdles.