MEP EP#212: The End of Electronics Manufacturing?!
Chris Church
Founder and current Chief Product Officer of MacroFab Inc
The former founder of Dynamic Perception
The former Co-Founder and Chief Architect of Alert Logic
Was on the previous MacroFab Engineering Podcast episodes
#127: Tariff Impacts
#142: Supply Chain Conspiracy SecuritiesCOVID-19 Outbreak in China
Topic today is the Coronavirus or COVID-19 outbreak in China and its impact on the global Electronic Manufacturing Supply Chain
If you want to know more about the virus itself I suggest going to the CDC website
~80% of factories in general are back to work in China, but only about 21% are fully staffed
PCB Vendors
Extended holiday, workers at a lot of Chinese plants who went home weren’t allowed to come back for two weeks
We have lots of production in Taiwan
Taiwan blocked all entrance to mainland Chinese on the 5th of February, many limits still in place
This is causing significant delays in engineering time for new PCB orders, as most of our vendors’ engineers went back to mainland China for the holiday, and haven’t been allowed to return
PCBs going to Taiwan/Vietnam/Malaysia, etc.
As soon as delays started happening, a lot of companies sent orders over to other Asian companies, of course, this caused a fast building backlog at those companies
Prices going up in Taiwan, Vietnam, etc
FR4 is now the real problem
Even if production wanted to speed up in Taiwan, Vietnam, ect.. they can’t get the raw materials fast enough
Mechanical / Custom Mfg Materials
This is the biggest challenge for a lot of our customers
Plastics and metals made in China are getting delayed by a month or more against the original lead times
Factories are under-staffed and backed up with big orders
Components
Right now, most component suppliers are back up and running, even if under-staffed
Small to mid-size orders won’t be impacted much, but high-volume orders sent direct to the manufacturers are getting longer lead times and higher prices
Yageo is one of the vendors we’re hearing about, as of late last week pushing lead times out past a year on some bulk orders with price increases as high as 50%
Vishay also has several plants closed as of Monday