Sat, Feb 15, 2020 - Page 12 News List

Shipments forecast cut on virus disruptions in China

LOWERING EXPECTATIONS:A market research firm said shipments this quarter would fall significantly, but that the memory industry would survive unscathed

By Natasha Li  /  Staff reporter

High-tech industries worldwide are facing labor shortages and shipping restrictions from an outbreak of COVID-19 in China, with hardware manufacturers bearing the brunt of the effects, TrendForce Corp (集邦科技) said in a report yesterday, as it cut its shipments forecast for this quarter.

Lacking key components such as batteries and printed circuit boards due to an overall delay in Chinese production, downstream original design manufacturers (ODM) for consumer electronics would see a decrease in production, the Taipei-based market researcher said.

As a result, TrendForce cut its shipments outlook for laptops, LCD TVs and monitors by 12.3 percent, 4.5 percent and 5.2 percent respectively to 30.7 million, 46.6 million and 27.5 million units this quarter, compared with a previous forecast of 35 million, 48.8 million and 29 million units, the researcher said.

Contract laptop maker Quanta Computer Inc (廣達電腦) yesterday posted a 25.9 percent drop year-on-year in revenue to NT$62.96 billion (US$2.1 billion) for last month, with laptop shipments of 2 million units, as the Lunar New Year holiday reduced working days.

Contract electronics manufacturer Wistron Corp (緯創) said it shipped 1 million laptops last month, while revenue fell 20.13 percent annually to NT$40.49 billion.

Shipments of other consumer electronics, especially smart devices, also face challenges as ODMs grapple with shortages in labor, passive components and camera lenses, TrendForce said, adding that there would be an estimated 12 percent year-on-year decline in overall production this quarter to 275 million units, a five-year low.

Total smartphone shipments this year are set to fall by 1.3 percent on an annual basis to 1.38 billion units, it said, adding that it might further trim the figure due to uncertainties over the outbreak.

The researcher also predicted declines in shipments of game consoles and smart speakers for this quarter to 6.2 million and 23.2 million units respectively, falling by more than 10 percent each from last month’s forecast of 6.9 million and 26.4 million units.

Lockdowns and traffic constraints in China have left upstream suppliers, such as semiconductor companies and display panel makers, with an increasingly severe shortage of factor workers as they struggle to resume production, the report said.

Chinese foundry firms are likely to see lower factory utilization this quarter as a result, affecting China’s IC packaging and testing companies further down the stream, TrendForce said.

Meanwhile, the memory industry has mostly been spared from the outbreak, as its Chinese production remains unhindered due to its high level of automation, the researcher said, adding that DRAM prices would nevertheless increase this quarter, owing to insufficient inventory among end clients.

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