Electronics Industry Overcoming the Coronavirus (COVID-19)

From US trade tariffs, to Australian bushfires, 2020 has presented many unexpected obstacles to the electronics industry.  The spread of COVID-19 though, was the last thing on anyone’s industry forecast.

On January 30^th, COVID-19 was declared a public health emergency by the International Health Regulations Emergency Committee of the World Health Organization.  Since then, the virus has claimed over 450,000 lives and has been confirmed in 188 countries in a span of under 6 months.

How COVID has impacted the electronics industry?

1. Disrupting the supply chain

Due to the rapid spread of the virus, manufacturing in many regions has been ceased or been extremely diminished.  On March 17, 2020, France imposed strict COVID-19 containment rules, pushing companies to embrace remote working and take necessary measures for the health and safety of employees. In stipulation of this, STMicroelectronics adjusted its front-end and back-end manufacturing operations at its French plants with 50% reduction in the manufacturing staff.

2. Lack of worksite coordination

Worksite coordination is essential for any electronic manufacturing project.  Oversight and collaboration of employees has been a challenge during this period of separation, making it difficult to streamline processes on every level of product development.

3. Restricted transportation

Technology has enhanced telework and enabled remote productivity.  However, manufacturers and suppliers both rely on unrestricted movement for the ability to develop relationships, develop prototypes and plans, and for addressing production line challenges.

4. Cybersecurity

The restrictions on travel and gatherings have forced a significant portion of the workforce to operate remotely.  This presented a unique opportunity for hackers to penetrate workers vulnerable systems.  Apart from the risk of hacked emails and phishing, manufacturers are susceptible to the loss of data and intellectual property, and the hacking of critical manufacturing systems.  Manufacturing companies have had a target on their back, due to the immense value that a hacker could obtain from breaching a single system.

Hope for the electronics industry to overcome COVID-19

In mid-March, as the COVID-19 was spreading across America, US hospitals reached a critical shortage of personal protective equipment (PPE) and ventilators.  There are a broad range of estimates of the number of ventilators needed in the US, ranging between several hundred thousand to as many as millions.  For the first time since WW2, the US government has tasked many electronics manufacturers with switching their focus to producing ventilators, even when they have never produced them before.  Automakers such as Ford, GM, and Tesla have used their idle facilities to start producing ventilators.  Other tech companies such as SpaceX, Dyson, and Virgin Orbit have joined in these efforts.  The sudden and desperate need for medical equipment has presented a unique opportunity for many EMS to enter a new industry and resume working.  This will likely keep the doors of many manufacturing companies open and could even create more jobs.

What has changed during the isolation period?

• Globalfoundries has filed papers to officially close its FD-SOI fab in Chengdu, China and lay off its 74 employees.
• Taiwan Semiconductor Manufacturing Company (TSMC) will build a $12 billion 5nm chip foundry in Arizona. The US government has been pressuring the company to build a fab in the USA after worries about US reliance on Asian fabs for advanced chips. The foundry is estimated to be complete in 3-4 years.
• Fath Components, an Aldershot based maker of enclosure parts and other metal and plastic parts, is using its main plant in Germany to produce FFP2 masks.
• Adafruit saw a 90% plunge in sales due to COVID-19. In response to the drop in sales, the company is now putting its 50,000 square foot factory to work building medical devices and PPE to help healthcare workers.
• Kitronik and Nottingham Hackspace have partnered to produce 500 face shields per day for pharmacy staff.
• Trackwise Designs has acquired Stevenage Circuits.
• Würth Elektronik is supplying the PCBs needed for the rapid manufacture of ventilators from its three production sites in Germany.
• STMicro agrees to cut production in French plants by up to 50%.

Following the peak of COVID-19’s spread, electronic manufacturers are beginning to resume production and the industry is progressing toward a degree of normalcy.  If your facility has resumed production or is preparing to, we invite you to contact us today.  Aegis Components’ procurement efforts are based on the principle of supplying high-quality components to our clients 100% of the time, and we are eager to fulfill any of your electronic component requirements.  Contact us today!