The Coronavirus Disease 2019 (COVID-19) is affecting China and is spreading within East Asia and into Europe and North America. In addition to the human cost of life, the impact of the spread of the virus on the global economy is only beginning to be appreciated and has deep implications for the world’s technology supply chain.
In a report titled “Impact of COVID-19 on the Worldwide Semiconductor Market Forecast, International Data Corporation (IDC) predicts an impact of $25.8 billion on the worldwide semiconductor market in 2020 amid the pandemic. The most probable situation (54 percent probability) is a year-over-year revenue loss of six percent and under this scenario, the supply chain will start to recover, and quarantines and travel bans will ease, over the summer.
However, the report notes that there is a one-in-five chance that a fast, strong bounce back from COVID-19 in 2020 is possible. Although on a global level, the crisis is just beginning, with too many variables to immediately craft a single forecast in response.
“The emergence of COVID-19 has brought with it travel bans and quarantines; massive slowing of the supply chain; uncertainty in the stock market; falling business confidence, and growing panic among the population,” said Mario Morales, program vice president, Semiconductors and Enabling Technologies at IDC.
“Despite the growing uncertainty and panic, technology suppliers must continue to focus on their long-term investments, maintain engagement with partners and prospects, and look to specific markets for stability. Emerging technologies like 5G, the Internet of Things, high-performance computing, and intelligent edge will be fundamental to an overall recovery by the technology sector.”
In the short term there will be lower demand for systems and some impact to component availability, but as recovery sets in, growth will return to the market.
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