Smartphone Industry To Face Supply Crunch Due To Covid-19 Cases China, Vietnam, And Taiwan

Electronics manufacturers who are planning to start their operations are likely to face supply issues as Covid-19 cases are increasing in China, Taiwan, and Vietnam. Notably, Covid-19 cases have been increased in China's manufacturing and export hub after March 2020.

Vietnam and Taiwan are also facing the same situation. In fact, operations of some smartphone players have been suspended for two weeks in Vietnam. Similarly, Taiwan Semiconductor Manufacturing Company which works 24 hours is working in shifts.

Experts Views On Supply Crunch

Experts also believe that if the same situation continues, then supplies of raw materials will fall in India. Experts added that India is getting 85 percent of raw materials from these three countries.

"This development will choke critical parts for the smartphone industry in India," Faisal Kawoosa, founder and research analyst at TechArc said. "The supply chain was just getting better though in some specific components like chipsets, display, and memories we still have shortages," he added.

In addition, several research firms have already said that smartphone shipments might decline by 10 percent in 2021 due to the second wave of Covid-19. In addition, these firms state that supply constraint and expected the third wave might affect the growth of the market.

ICEA believes that operations might be stable in June and July as China is taking measures to contain the spread in Guangzhou, which is an export hub of China.

"Since September 2020, the global industry has been struck with these shortages particularly of semiconductors," said Pankaj Mohindroo, chairman, ICEA. "We do not see the condition worsening in June and July 2021. Manufacturing operations in China, which is the main source, are normal and robust," he added.

Notably, Guangzhou is manufacturing products for automotive and consumer segments; however, Covid-19 infections spread to other markets, then it will affect the supply chain. Furthermore, the spread in Vietnam factories might impact Apple and Samsung factories.

This means there are high chances that productions of televisions, tablets, and phones might be impacted. However, we should not forget that these three countries have good a record of containing the virus, which is why we believe that it might not affect India's manufacturing plant.