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COVID-19 and the Electronics Industry

March 13, 2020
Editor Bill Wong comments on how COVID-19 is affecting the electronics industry, from supply chains to materials to trade shows.

Normally, the editorial for the print issue of Electronic Design is about the latest technology trend or articles in the issue, but the coronavirus, COVID-19, has turned everything on its head. I was at Embedded World this year, which is one of the few trade shows that hasn’t been cancelled or moved. This was partially due to the fact that it occurred relatively early and steps like the U.S. travel ban to Europe were not in place. Almost any travel needs to take these kinds of actions into account in addition to considering the virus itself.

COVID-19 is having a significant impact on virtually every front. On the plus side, people will have more time to read Electronic Design’s print issues and online articles, and quite a few will probably take advantage of our webinars and bootcamps because they’re online.

Unfortunately, there’s a much larger downside in our industry let alone the medical impact. Supply chains are being disrupted. Asia is the major supplier of electronics and China is where the virus problem is at its worst. A significant amount of uncertainty exists because of the changing scope as well as the reactions by governments and companies.

A number of the larger companies pulled out of Embedded World as they implemented a general travel ban. While it impacted the show, such a ban also affects their sales and support efforts in general. I was able to meet with many of the small- to medium-size companies that stayed, and some of the reasons they gave was that the show was one of the few where they can get exposure.

Many companies may not survive this crisis, especially if it lasts for a long time. Just-in-time delivery is feeling the effects as well as advertising and support. Dependencies in the supply change and availability of critical components can easily cause an otherwise profitable company to go bankrupt. Counting on tight margins is fine if everything is good, but few are likely to have contingency plans for what we’re seeing with the impact of COVID-19.

Our industry tends to be readily supported by remote interaction support, such as video conferencing and other collaboration tools, but certain still actions still need be done in person. The question is how quickly everyone can pivot to utilize these alternative tools and get procedures in place to continue to work with customers and clients.

Another question to ask is what will happen after the pandemic runs its course, which it will eventually.

Are alternate sources of materials going to change how a company operates? Will the customer still be there in a few months, or has the impact of the virus caused them to fail or no longer need your product? Likewise, how will functionality like video conferencing, collaboration tools, and web-based tools affect the way you operate in the future? Many are inadequate as they stand, but there may be improvements or business processes may be altered to accommodate those limitations, making them a viable solution when face-to-face interaction becomes safe.

This industry was tough enough when dealing with new technologies ranging from securing the Internet of Things to adding artificial intelligence to the software mix. Throw in a potentially fatal virus and a host of new remote collaboration tools and the resulting, hopefully, workable solutions may change how we all work forever. We’re all being forced to reconsider how we work with each other, what tools we will use, and what venues marketing and advertising will take. There are few winners and many losers at this point.

The picture may become clearer in a few months, particularly if things like a vaccine for the virus come about. Here’s hoping that the effects of COVID-19 go away quickly and that our worries only concern whether or not that self-driving car down the road is safe to be around.

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