As expected by the PCB industry, the resumption rate of work among factories outside Hubei is approximately 50% to 80% and is, therefore, considered that the worst scenario in China has passed. With the growing recovery rate of work, operations should progress in the second quarter but the market is still concerned that although the production challenges are resolved, the epidemic has spread to European and American countries and will, then affect the demand side. Essentially, COVID-19 epidemic had previously resulted in more than 80 cities around China shutting down or attaining close-type management, causing complications in transportation, logistics, storage, and retail. Based on the market reflections, although factories in China have resumed work, it remains difficult for these plants to return to normal levels in a short period of time and there are fears of the interrupted flow of materials and workers since there is a shortage of material upstream, as well as the lack of workers and the inability to ship goods downstream.

 

Apple has recently advised that because the expected work resumption of the supply chain is far behind the schedule, it is expected to result in a global supply shortage of iPhones, in addition to the estimated decline in retail demands in China. So, the financial estimates for the second quarter of the 2020 economic year may not be achieved. Overall, PCB is regarded by the market as the mother of the 3C industry. At present, approximately 63% of the PCB output value by Taiwan's factories are produced in mainland China and 35% in Taiwan. For these factories, their production bases in mainland China are mostly concentrated in Jiangsu and Guangdong Province, while other provinces include Hubei (Huangshi, Xiantao), Chongqing of Sichuan, Hekou of Liaoning, and Qinhuangdao of Hebei.

 

 

As stated by the insiders of the PCB industry, some manufacturers have produced advanced iPhone-related products in Taiwan but there are too many components required for mobile phones, so it remains unknown if production will be impacted. However, the market is fairly optimistic about the brand power of Apple and its vast amount of orders, therefore, if the market is lacking materials, the problem can be solved easier for Apple than any other brand. Since the current resumption rate of work has not yet returned to a normal state, industry insiders said that most of the difficulties include the "self-quarantine first when workers return", except for a small number of people who are "not able to come back". Therefore, the importance of allocating workers would first be completed in large factories, which will naturally obstruct the manpower of small factories. Nonetheless, what some small local factories produce may be a part of the component supply and such an interconnecting effect can impact the resumption of work. The market remains optimistic that the Chinese government can continue normal production as scheduled in April.