According to DigiTimes research shared today, integrated circuit (IC) design companies in both China and Taiwan will see a major negative impact on their revenues in Q1 2020 with foundries expected to suffer in Q2, all due to coronavirus. According to the report, the outbreak will causes issues for the semiconductor, laptop, smartphone and display panel and markets in H1.
Laptops Expected to Suffer the Most
As much as 90% of notebook manufacturing happens in China, DigiTimes said, noting that the sector has been hit in terms of both component supply and consumer demand. According to DigiTimes, Taiwanese ODMs, such as Compal Electronics, Quanta Computer and Wistron, have resumed operations at their plants in Chongqing, Kunshan and Shanghai, China but only at 20% capacity.
The plants are expected to increase capacity utilizations starting February 24, when a 14-day quarantine at their component suppliers will end. But the ODMs will reportedly still need to recruit new people because the rates of returning employees are quite low and more people are looking to work in service instead of manufacturing.
Semiconductors
According to the report, the highly automated foundry plants in China will only be minimally affected by the outbreak in Q1, as they were already expecting a lower run due to Lunar New Year.
However, their revenues will start to weaken in Q2 as lower consumer demand and delays in product launches are expected to slow inventory depletion for semiconductor companies. Furthermore, shipments of 5G chips will probably not see a significant increase until Q4, DigiTimes predicted.
New iPhone at Risk
Four of the largest Chinese smartphone makers, Huawei, Oppo, Vivo and Xiaomi, are expected to lose 15.2% of their quarterly shipments total, which will fall to 84 million units. Some smartphone parts suppliers are expected to operate at only 50% capacity utilization until the middle of March, according to DigiTimes’ research.
Foxconn is also suffering from "uncertainties in employee returns" to its China-based plants, and this is expected to decrease "shipments of a new entry-level iPhone model by 10% in the spring and affect scheduled normal shipments of new iPhones in the autumn," the publication said.
DigiTimes said Apple rival Samsung should be more immune to the outbreak due to heavier manufacturing in Vietnam and India.
Even LCDs Are Affected
Three of the major Chinese LCD panel makers, BOE Technology, Tianma Microelectronics and China Star Optoelectronics Technology (CSOT), are all based in Wuhan, the center of the 2019-nCov outbreak. CSOT has been impacted the most by the outbreak, reportedly operating at only 30% capacity as many workers were put in quarantine or sent home.
CEC Panda LCD Technology's Nanjing plant, BOE Technology's plants in Chongqing and Hefei, as well as Century Technology's plant in Shenzhen will be closed until February 17, so their shipments are expected to be at least somewhat affected by the outbreak.
Meanwhile, Chinese AMOLED display panel makers, such as EverDisplay Optronics, Visionox and Royole, will not be as impacted because they mostly import their components, DigiTimes said.
