Widespread Outbreak of Coronavirus Impacts Overseas Electronic Contract Manufacturing

Although the Coronavirus was first detected in Wuhan City, Hubei Province, China a couple of months ago, the World Health Organization gave it an official name on February 11,2020: “COVID-19.” As of this writing, it continues to spread, infecting thousands of people daily and the impact on the worldwide economy is already being felt and in the electronics manufacturing services industry in particular.

China has been hit hard by the virus and has taken measures to limit public gatherings to contain the spread of the virus. This includes extending the break for Chinese New Year well beyond the traditional two weeks where all factories shut down. This is already impacting overseas electronics manufacturing in the following ways:

Slower Restart of the Electronic Manufacturing Factories

Many workers in these factories originate from regions far away, and returning to them is a problem for many workers because of the quarantines and restrictions in place due to the outbreak.

Because electronics manufacturing in China tends to be a manual process, and products such as notebook computers, tablets or mobile phones require hundreds of people touching each product during the assembly process, the risk of exposure to the Coronavirus is high. For this reason alone, many workers may be reluctant to return to work, resulting in delays due to needing to hire and train more workers. This will delay production on numerous electronic products.

Travel Restrictions Will Impact the Development of New Electronic Designs

Typically, a lot of companies begin manufacturing prototypes for new electronics immediately after the Chinese New Year. This usually involves teams of engineers working within Chinese factories, making adjustments to designs, fixing problems, etc. Even after the Chinese government lifts travel restrictions, the travel recommendations against traveling there from the U.S. will probably remain in place for a while to make sure that the virus has been contained and it is safe to travel once again. Many U.S. engineering teams may be reluctant to travel to the region as well. This will delay the production of new models of electronics for the upcoming Christmas season. Having engineers on-site is an essential part of the electronic assembly process for new product development.

Continued Strain on the Supply Chain

President Trump’s 18-month-old trade war with China has already caused the production of some electronic components to be more expensive and harder to find, but the outbreak also threatens to make the situation worse. If the production of some of the core electronic components manufactured in China is delayed, it delays the rest of the downstream manufacturing process.

What is the Solution to These Delays?

The easiest solution is to bring electronic contract manufacturing back home to the United States. If you find the right electronic contract manufacturing company, you can have your engineering design teams stay in the U.S. and get the processes and problems ironed out before scaling it into wider production. With the level of automation and quality of some electronic contract manufacturing companies, you may even be able to bring all of your electronic manufacturing tasks back to the U.S. CST has the engineering and manufacturing capability to scale from low volume NPI to mid-to-high-volume production assembly.

Reap the Benefits of Domestic Electronic Contract Manufacturing

The spread of the Coronavirus is just one of many reasons to bring electronic contract manufacturing home to the United States. CST conducted early risk-mitigation plans in January 2020 due to the increasing delays associated with the widespread outbreak of the Coronavirus on ECM’s in Asia. CST has plans in place with suppliers in regions not severely impacted by the Coronavirus as well as the local US domestic areas to ensure customer product schedules are not impacted. For those customers moving away from Asia to manufacture their higher-volume products, CST is a highly regarded option. For more information, give us a call at (503) 640-5733, email us at info@cascadesystems.net, or complete our simple online contact form.

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