The supply chain for large corporations, including manufactures and integrators alike, has been largely disrupted due to the recent rapid spread of the Coronavirus outbreak. At this point, the disease has estimated to have killed more than 2,800 people, with over 82,500 infected. In the wake of these terrible events, several key manufacturing cities in China have shut down, and this has left AV consumer product manufacturers with little other options to continue operations.
As the virus continues to wreak havoc across the entire global tech industry, many conferences, meetings, and other events have been canceled. ISE 2020 has also seen several large companies withdraw from the event. LG, for example, backed out of the event completely. There has been a large decrease in attendees as well.
The consumer electronics sector has especially been taking the brunt of the economic burden. For example, electronic displays as a large part of the industry of Wuhan, the first Chinese city to go under complete quarantine. They are estimated to be responsible for 6% of the OLED production capacity, 3% of mobile LCD capacity, and 2% of TV LCD capacity. While many large companies like LG are trying to shift production to surrounding countries, they are struggling to do so.
These shortages have caused prices to rise on several key products like LCD panels and screens. leading Chinese suppliers of LCD panels for TVs, notebook PCs and PC monitors now are planning to raise panel prices more aggressively. For example, the price for an open-cell LCD-TV panel was originally expected to rise by $1 or $2 per month in February. However, the actual increase may be $3 to $5 for the month.
While some firms are quietly closing facilities, and weathering the storm silently, Nortek Security and Control are leading the charge in terms of supply chain transparency. They have spelled out the bad news in emails, statements, and newsletters to fully make integrators and other purchasers aware of the upcoming disruptions in the supply chain.
Despite growing concern about the scope and scale of these terrible events, the AV industry is still expected to continue to grow in 2020 to new levels. It is projected to begin a period of long-term growth in the next 25 years.