A survey of companies showed that most reported problems receiving components; 15% expect partial production shutdown
A new survey conducted by the Brazilian Electrical and Electronic Industry Association (Abinee) regarding the impact of the coronavirus on production in the electronics sector indicated that 57% of those interviewed had some type of problem in receiving materials, components and inputs from China.
The result is 5% higher than the previous survey, conducted two weeks ago. This situation is particularly evident among manufacturers of products such as cell phones and computers.
According to Humberto Barbato, CEO of Abinee, the new survey indicates a worsening situation for industries that depend on external suppliers. He adds, "These are delicate times, and we're likely to see several shutdowns from now on."
But he believes that, for now, there's no risk of a shortage of finished products in the Brazilian market, such as cell phones and computers. "The problem isn't more serious because we have local production of these products," he emphasizes.
According to the Abinee survey, 41 TP3T of the surveyed plants have partially shut down their plants. Another 151 TP3T have already scheduled shutdowns for the coming days, most of which are also partial.
The survey indicated, despite the impact on supply, that 54% still have no plans to halt their operations. The decision will depend on how long the supply problems persist.
Amid this scenario, 17% of those surveyed stated that they are unlikely to reach their projected production for the first quarter of this year. According to these companies, production for the period is expected to be, on average, 22% below the projected figure. For half of the companies, however, projections are expected to remain unchanged; while another 33% stated that it is not yet possible to provide this guidance.
Research indicates that it will take companies, on average, two months to regularize their production pace after shipments of materials, components, and inputs from China resume.
The research involved the participation of around 50 industries from different areas of the electronics sector.
Currently, 42% of the components used by the electronics industry in Brazil come from China, totaling US$$ 7.5 billion in imports in 2019.
It should also be noted that other Asian countries accounted for 38% of electrical and electronic component imports last year. Therefore, the Asian region accounts for 80% of the country's electrical and electronic component origins.