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Industry Rumors: Coronavirus can be final blow for camera industry
  • Issue are not only Chinese factories (most will be closed in February and March, despite February 10-14 public statements).

    As soon as thing will spread to much less organized Vietnam and Thailand it can be much worse.

    Japanese factories can't work without thousands of parts also.

    It is soft talks now about cancellation or postponing by 2 month of both CP++ and Photokina.

  • 90 Replies sorted by
  • What other industries should be affected also

  • Half of manufacturers already cancelled Photokina?!

  • @EspenB

    You mean that they never wanted to show up :-)

    Just timing is very bad for such event. Right after CP++. And Japanese actually do not think that it is anything more important than CP++ :-)

  • It is enough to check airlines cancellations end dates, they are all in the end of March already.

  • The number of foreign workers in Japan totaled 1,658,804 as of October last year, up 13.6 percent from a year earlier and marking the highest level on record, government data showed Friday.

    It was the 12th straight year of increase as companies continue to struggle with a labor shortage amid Japan’s rapidly graying population.

    Those of Chinese nationality accounted for about a quarter of the entire foreign workforce at 418,327, followed by Vietnamese at 401,326 and Filipinos at 179,685, according to the Ministry of Health, Labor and Welfare.

    https://www.japantimes.co.jp/news/2020/01/31/national/foreign-workers-japan-record/#.XjVtujIzaUl

  • On Saturday, Huanggang, a city of 6 million people near Wuhan, has banned residents from leaving their homes in an effort to stop the coronavirus. The ban states that 1 person per family can leave every other day to buy basic needs.

    Chinese manufacturing issues will become apparent starting mid February.

  • Some firm bosses initially expect two months of full stop (till April). Can be up to 3-4.

    All media changed tone, all publications are being checked at least 3 times before publishing or going online.

    Probability of mass panic is high.

  • President Donald Trump on Thursday sought to assure Americans about the spread of a new coronavirus, saying it would have “a very good ending for us … that I can assure you,” hours after the World Health Organization declared the outbreak a global emergency.

    https://www.politico.com/news/2020/01/30/trump-close-cooperation-china-coronavirus-109701?fbclid=IwAR2u2pCs-IqaIxChQUzyaskA26Whp6t6zfKdYXiececPj1BqrRvdYW6hV_E

    China's coronavirus could bring jobs, manufacturing back to the US, Trump Commerce Secretary Wilbur Ross says

    https://www.msn.com/en-us/money/markets/chinas-coronavirus-could-bring-jobs-manufacturing-back-to-the-us-trump-commerce-secretary-wilbur-ross-says/ar-BBZu6xa?fbclid=IwAR3QYyGTJL3qI88CCE036adhsVoGCxW5F5ka6ueY5QLDx4RU7VYOgqIII7c

  • The electronics industry is poised for a cascading disruption that could change industry growth forecasts for the year. Bill McLean, president of semiconductor research firm IC Insights, said the virus has exacerbated the economic unease that has stalled semiconductor capital investment.

    “Brexit, trade issues and now the coronavirus are causing global uncertainty,” he said at a Boston-based forum. “Uncertainty causes [businesses and consumers] to freeze.” Worldwide, semiconductor capital spending is forecast to decrease by roughly 6 percent this year, from $103.5 billion in 2019 to roughly $97.6 billion.

    Zhang Ming, an economist at government-backed think-tank the Chinese Academy of Social Sciences, warned that the virus could push China’s economic growth below 5 per cent a year in the first quarter, reported the Financial Times. Economic consensus currently puts China’s GDP growth at 5.7 percent. That average has steadily declined since 2018, according to McLean. — EE Times

    More than 300 of the Global Top 500 companies have a presence in Wuhan, including Microsoft and Siemens. Wuhan is located in the Hubei Province.

    Wuhan has 10 car factories, including those Honda, Renault, PSA and General Motors. The car industry represents around 20 percent of the city’s economy and employs 200,000 people directly and more than a million indirectly.

    Most factories lose about two weeks of production in total during the Lunar Holiday but more production will be lost as the holiday has been extended.

    https://global-macro-monitor.com/2020/01/31/the-global-supply-demand-shock-of-the-coronavirus/

  • Although media and scientists are debunking theory of HIV insertions in Coronavirus:

    China testing HIV drug as treatment for new coronavirus

    (Reuters) - China is testing an HIV drug as a treatment for symptoms of the new coronavirus that is rapidly spreading, said drugmaker AbbVie Inc on Sunday. China health authorities requested the drug to help with the government's efforts to address the crisis, according to Adelle Infante, a spokeswoman for North Chicago, Illinois-based AbbVie.

    https://mobile.reuters.com/article/amp/idUSKBN1ZP0QK

    Doctors 'cure' coronavirus patient using HIV wonder drugs

    Beijing Municipal Health Commission confirmed the use of the HIV drugs to treat patients suffering from the Wuhan coronavirus on Sunday.

    https://www.thenational.ae/uae/health/doctors-cure-coronavirus-patient-using-hiv-wonder-drugs-1.970084

  • Notice about stock market in #China. No one is allowed to sell when the market resume on Feb. 3. Biding price to be controlled before opening, no net sell before Feb. 7. Needs special permission for sales over 10M yuan.

  • Panic starts to spread among camera representatives.

    Not only sales are bad, but now companies can use this virus issue to quickly cut remaining people who still have long time contracts.

    Idea of large firms is to hire people only for the time of big events. Huge savings.

    Probability to see Chinese factories working from February 10th is around 10-15%.

  • Smartphone shipments in China are likely to fall off a cliff in the first quarter of 2020 due to the coronavirus outbreak, according to industry sources.

    Cameras sales will drop around 4-5 times in China in virus affected part of Q1.

  • ..so we might be looking at April-May? Although some factories are up and running 24 hrs a day manufacturing ambulances, medical equipment and supplies.

    Hot and humid weather may end the novel coronavirus – as well as the development of a vaccine

    More recently, scientists from Hong Kong University (HKU) including Professor Malik Peiris and Professor Seto Wing Hong showed that low temperatures and low relative humidity allowed the SARS virus to survive much longer than they would in high temperatures and humidity.

    The HKU team argued that this may be the reason warm and humid Southeast Asian countries did not have SARS outbreaks, unlike Hong Kong and Singapore where in their words, there is “intensive use of air-conditioning”.

    Thus, just as with influenza, the 2019-nCoV may slow down when the sun starts to shine more and the weather warms up in temperate and subtropical countries.

    https://www.channelnewsasia.com/news/commentary/hot-climate-wuhan-virus-vaccine-12389694?fbclid=IwAR2eHa3L_TytKPyCzgQDfKO7Kv25BQxx0VLGLPvEEoWSkpxD0ZO-ndNuHy4

  • There is a great disturbance in the Force

    Already, FedEx announced “adjusted” service in “many provinces in China,” and said Friday that customers “might experience delay.” While UPS is airlifting more than 2 million masks and protective gear to China, the logistics firm has cancelled 22 flights to the country. American Airlines cancelled all flights to China through March 27, and Delta did the same through April 30. British Airways, Lufthansa, United Airlines and Virgin Atlantic, among others, have all made similar moves, and Cathay Pacific, which has its main hub at Hong Kong International Airport, said it will more than halve its flight capacity to mainland China through the end of March.

    “This is going to be a significant disturbance in the supply chain,” Sean Maharaj, managing director of global management consultancy AArete, said. “We compare this to the impact of SARS (severe acute respiratory syndrome), but the export capability and global merchandise manufacturing was significantly different in terms of not only the volume coming out of China, but the complexity of the supply chains.”

    The supply chains of 2003 China when the SARS outbreak started, and plagued as many as two dozen countries before it could be contained, are a “quantum leap” from today’s, Maharaj said. “The Guangdong province alone exported more in 2018 than China did as a whole 17 years ago, so it’s pretty significant,” he said. “This is going to have repercussions, in my opinion, for years.”

    Taking transportation alone, any goods coming out of China will face export challenges. “This is going to be a major issue in terms of shipments. Longshoremen, cargo ships are going to be short of volume, there’s going to be way too much capacity…and excess capacity is pushing down already fragile rates,” Maharaj said, adding that this comes on top of tariffs that have already weighed on costs. Air freight quotes have already gone up. “This will go all the way through to warehousing and everything we do to get production on shelves,” he said.

    With companies like FedEx and UPS already making moves to halt service, delays may be the least of the supply chain’s concerns. “Once providers like that go into crisis mode, we’re looking at more than delays,” Maharaj said. “We’re talking about cancellations and non-shipments.” Even companies considering temporary inventory holds may be met with new challenges in trying to transfer goods out of China to get them to where they’re going on time. “That’s going to be a major constraint,” Maharaj said.

    Mainland China and Hong Kong-based buying offices have asked staff to work from home until further notice, and with many brands and retailers in the midst of Fall/Winter buying, travel restrictions could hinder those orders. Some Western retailers have even cancelled planned visits from Chinese mills.
  • Many US companies cheat by not paying their suppliers in China or delaying payment until the supplier goes bankrupt knowing they work on razor thin margins. Then, they shop for another supplier. This happened far too often when China was climbing out of poverty. Now, many suppliers can afford to say “NO!” to these cheats. The US will go on to play the same game with other poorer developing countries.

    Huawei and other Chinese phone companies don’t exploit their workers like Apple. There is no need for suicide nets like the Apple factories which are contracted to Taiwan-based Foxconn to distance itself from their exploitation.

    ========

    As I've reported here for a decade, profit margins in the vast majority of these supply chain companies are wafer-thin, with 1% being bandied about as a typical profit margin

    U.S. corporations that assume their supply chains will return to normal in a week or two are in for a big surprise: consequential chunks of their supply chains, likely chunks they never paid much attention to, will dry up and blow away. The factories will not re-open, and the workers won't return.

    Any way they cut it, costs will rise whether Corporate America seeks suppliers outside China or alternative suppliers in China. With global wages stagnant for the past decade or two, raising prices is a non-starter. Net-net, corporate profits will fall even if sales remain robust, which is unlikely given the world's largest economy and manufacturing center is grinding to a halt.

    Once the supply chain breakdown comes home to roost in Corporate America, the mass delusion that the U.S. economy is invulnerable will collapse in a heap. Was it ever plausible that China's economy could grind to a halt and there wouldn't be a domino-like collapse of all the weak links in its supply chains? No. Companies living on debt and speculation only needed the slightest push to careen off the cliff into insolvency. The coronavirus is that push.

    Was it ever plausible that China's economy could grind to a halt and there wouldn't be any consequences for the U.S. economy? No. Alas, mass delusions always end badly.
  • Multiple firms got requests to not go to work till February 17th.

    It is expected that government will prefer to extend measures by one week instead of openly tell about April.

  • Given there is so much uncertainty right now and we cannot predict when the current state will end, our advice is to watch for the developments and stay in compliance to the best you can. For example, Beijing is sort of business as usual in that employees are now back to work, though many are working remotely as the government has encouraged them to do so at least before February 10. But what happens after February 9? Will the government continue to encourage employers to have employees work at home to avoid crowd gathering? This is likely but we just don’t know now. The mandatory rest period is still in place in Shanghai through February 9 and what happens after that? We don’t know.
  • @jleo

    Just watch out as all the "pleasant" sides of capitalism start to show themselves in China soon, as reserves will be going out for both small and medium firms. Individuals will be also abandoned with hundreds of millions suddenly not having money and trying to return home again.

  • yes, well many small companies and family businesses don't pay their workers anyways so nothing new :)

    In Hong Kong, the "freedom fighters" who have been beating up mainland tourists and workers for months, are now calling for more deaths in China! Nice guys. They are also demanding the HK govt close the border to China. They may not realize that almost all their food, water and electricity come from China. Biting the hand that feeds them!

    But the sense of abundance is deceiving. In truth, land-scarce Hong Kong is among the world’s most “food-vulnerable” places, importing nearly everything it eats and drinks. About 90% of its food supply is imported, according to the food and health bureau, and most of it comes from mainland China, including all the fresh beef, 94% of the fresh pork, and 92% of the vegetables.
  • Airpods shortage soon?

    The US tech giant had ordered its suppliers to produce up to 45 million units in the first half of the year to keep up with surging demand for the wireless earphones.

    Now, however, the current stock of AirPods is running low, with most of the finished products reserved for Apple's own online and offline stores, the sources said. Currently, the standard AirPods are still in stock, according to Apple's official online store, while there is a one-month waiting period for the premium AirPods Pro launched last September.

    Luxshare Precision Industry, also known as Luxshare-ICT, Goertek and Inventec, the three key manufacturers of the AirPods, have halted the majority of production since the Lunar New Year break began, two people familiar with the matter told Nikkei. The three companies now have at most two weeks' worth of materials and components needed for AirPods assembly, and must wait for component makers across China to restart operations in order to receive fresh supplies, the people said.

    "Because of the virus outbreak, it has already been about two weeks since the assemblers have shipped any new AirPods series," said a person familiar with the situation. "All of the stores and carriers selling Apple products are really counting on suppliers to resume work next week..

    The three major AirPods assemblers, like other Apple suppliers, are scheduled to resume work on Monday, but their production utilization rates may reach just 50% at best in the first week given the current conditions, a source familiar with the matter said.

    "One of the big concerns is whether other parts suppliers in China can smoothly resume work to produce enough parts for final assembly," the person said. "We really have to wait and see how things play out next week. If the assemblers could not get enough supply of parts in two weeks, it will be a big problem."
  • @jleo

    Most amazing thing in capitalism is how all media is worried about AirPods , but not about people and their needs. despite AirPods being total shit tech made with sole purpose of record profits (Airpods self cost is only around 1.5x of good Chinese wireless systems, but retails is much much higher)