china, coronavirus, electronics manufacturing, EMS, labor, off-shore, onshore manufacturing, pcb assembly, PCB Manufacturing, Procurement, Supply Chain, Supply Chain Management

Coronavirus Manufacturing Update – February 13th, 2020

Since the coronavirus outbreak started, we have been on uncertain ground when it comes to impact. The Corvid-19 virus originated in Wuhan and is a health crisis affecting a large number of people. It is still primarily concentrated in China, but ripple effects have spread around the world as all of China has begun to slow down production in areas most heavily affected by the virus. Even in areas outside of Wuhan, travel and shipping restrictions have slowed down deliveries. While there are a number of media stories about the impact on specific industries and companies like Tesla and cloud providers, we’ve had little clarity about what this means for the electronics manufacturing supply chain in North America.

Impact to MacroFab customers

The biggest impact to MacroFab customers is a 3-4 day delay on average, for PCB sourcing. Our PCBs are primarily sourced from Taiwan, where factories remain open but short-handed as the engineers who traveled to mainland China have had trouble returning from New Year’s celebrations. Here’s what we know today about the impact on electronics materials supply chain and how it affects MacroFab’s customers:

  • PCB sourcing has slowed down by 3-4 days on average. The lead times you see in the MacroFab platform will always reflect the most accurate estimates we have, and we will continue to adjust lead times as we get guidance from our supply chain. We have not seen breaks in the PCB supply chain, but things are definitely moving slower. The best course of action is to allocate enough time in your projects to deal with these delays. 
  • Most component sourcing has largely been unaffected. We are seeing longer lead times for some components, but most inventory used in Q1 is already in distribution, so we have not seen significant materials delays or shortages. The biggest risk to components right now is if US customers start to front-run their purchases, as we saw with tariffs over the last 2 years, which will deplete inventory faster.
  • Mechanical component lead times have slowed down most and the lead times will vary widely. If you rely on Chinese suppliers for your mechanical parts, its best to allocate plenty of time to absorb unexpected changes. 

Keeping you updated

The long term impact of the coronavirus is a moving target. Please continue to visit this page to get the latest updates as we learn more. 

  • January 1st, 2020 update – standard lead times +7 days for some orders scheduled for February to accommodate the Chinese New Year celebration.
  • January 27th update – standard lead times +3 days for February orders as the Chinese Government extended the national Chinese Lunar New Year holiday for an extra three days to stem the spread of the virus throughout most of China, while extending it for a week in Shanghai.
  • February 13th update – standard lead times +4 days to accommodate for longer PCB production timeframes, lead times are reflected in our platform