Memory industry faces even harsher impact in 2Q20
Siu Han, Taipei; Jessie Shen, DIGITIMES
Thursday 13 February 2020
Challenges arising from the coronavirus outbreak may become severe in the second quarter, according to sources in the memory industry, which may suffer from upstream material shortages starting later this month.
The outbreak impact has been more severe than expected, said the sources, adding that factories in China have experienced low labor return rates after the Lunar New Year holiday. The fast-spreading coronavirus in China has put many cities in lockdown, and not only local high-tech companies but also foreign ones with manufacturing operations locally in China have implemented closed-off management measures.
Sources at makers engaged in the memory industry supply chain pointed out that the existing materials inventories may fail to support their output after mid to late February as the coronavirus outbreak disrupts production at related suppliers. Less than 30% of their factory employees have managed to return to work amid the outbreak, the sources continued.
Concerns about certain materials shortages have emerged, said the sources. A rapid slowdown in demand from China's local channel distributors due to the outbreak is being identified as another challenge facing the memory industry, the sources noted.
Some memory firms expect the coronavirus impact on their shipments in the second quarter to be more substantial than that in the first, the sources said. Recovery of the supply chain and also on the demand side may take a longer time, the sources added.
digitimes.com |
