Amid China’s COVID surge, electronics’ manufacturers prepare for the worst

A massive surge in COVID-19 cases in China has jolted the supply chain managers worldwide, and they’re making arrangements for the worst, if it comes to it. China is the raw material and manufacturing base for many companies headquartered globally, and manufacturers of consumer durables and electronics are trying to prepone raw material and critical components’ shipments. All eyes are on China in this moment.

“Some impact on supply chains is already visible with shipment delays of about 15-35 days. Less workforce due to Covid impact at factories in China is expected to further increase the pressure on shipments in the coming weeks. I believe higher selling products and stock keeping units (SKUs) may see a more severe impact such as bigger-sized TVs and premium models of appliances,”

Avneet Singh Marwah, CEO, Super Plastronics Pvt Ltd (SSPL)

With the Chinese New Year also approaching fast, and the pandemic taking the upward path once more, companies dependent on China for their essential components and raw materials had started stocking up December onwards. This is done to prepare for the summer season that starts from April.

Also Read: China’s rising COVID-19 cases keeping Indian exporters on tenterhooks

“Most of the raw materials and components required for production for the March quarter have either reached or are in transit. But one will need to see how the situation pans out post the Chinese festival season which ends in early February. If there is not much improvement in the Covid situation, then the industry may see an impact on AC production in the June quarter.”

Kamal Nandi, Business Head and Executive Vice-President, Godrej Appliances

Companies are also highly reliant on China for components such as compressors for air-conditioners, among others. Stating that the situation is a bit uncertain due to the rise in COVID cases, Eric Braganza, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA), said the March production of durables could get impacted if raw material or component supplies are not shipped before the Chinese holidays which kickstart from January 22.

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