The COVID-19 epidemic has not been effectively controlled yet and Taiwanese staff working in Chinese enterprises in China are not particularly willing to return to work, which has resulted in these companies being unable to resume work as expected. As a consequence of worsening situations such as the short-term lack of workers, as well as unsolvable problems with the supply chain that is beyond resolution, the performance of the supply chains for smartphones such as Huawei and Apple is expected to be compromised in the first half 2020. Of these plants, Foxconn and Pegatron should be affected the worst as they require a large number of personnel to work in their assembly plants. 

    As demonstrated by Conterpoint, a survey agency, the COVID-19 epidemic is expected to result in a decline in global smartphone sales by 5% to 6% compared to last year, while the high purchase behavior among consumers will be delayed from the first quarter to the third quarter. Among these delays, the greatest impact from the COVID-19 epidemic is expected for the Chinese market and it will largely impact the major smartphone brands such as HUAWEI and Apple, which hold significant market shares in China. 

 

    Chinese enterprise’s schedule to resume work in China has been further postponed, while the measures of the city shut down have caused a sudden decline in business activities. It is considered that it will take another two months before the market resumes to normal. In view of the worries regarding the epidemic and uncertainty about the future by the general public, Conterpoint estimates that shipments in the first quarter will be decreased by 20%, while the increase in stock will also affect releases and shipments in the second quarter. There have also been rumors stating that the iPhone 9 (SE2), which is expected to be released in March, will be challenged by supply issues.

 
 

    The main supply chain smartphone manufacturers for Huawei and Apple include Largan, TSMC, Compeq, and Win, while the other manufacturers include Foxconn, Unimicron, Zhen Ding-KY, Delta Electronics, ASE, Pegatron, Flexium, Catcher-Group, etc. All these manufacturers also comprise of the supply chain for Apple's smartphones. (News source: Commercial Times)