The coronavirus (COVID-19) is expected to put incredible strain on the world’s economy, which will be effectively halted for three months or more. Many companies will not survive this initial phase, says GlobalData.
Noting that this global pandemic is by far the most significant theme to affect the technology industry in 2020, GlobalData said in a statement that prior to the virus, component makers were already suffering from waning global business confidence and flagging capital expenditure on automating and upgrading plant.
GlobalData published a fully revised report, ‘Tech, Media & Telecom Trends 2020’, to reflect the impact of COVID-19 on 17 separate TMT sectors and the companies within.
David Bicknell, Principal Analyst in the Thematic Research Team at GlobalData, says: “In autos, GM, Ford, Chrysler, Volkswagen, Toyota, Honda and Hyundai have closed plants due to COVID-19. This has caused an immediate blow to the already stuttering parts suppliers. The collapse in demand for electric vehicles has hit lithium-ion battery cell suppliers.
“You’d like to think that the market for components for consumer electronics will bounce back if consumer confidence returns and supply chains return to working order. If there is a rebound, it will be some way off. The key thing for component makers is to recognise and act on the signs of recovery when they emerge.”