Optimism
There are ads on TV and social media encouraging viewers to see the world as ‘reopening’ as the COVID-19 pandemic is said to be winding down. Inherently skeptical and with many mixed messages coming from CE companies, we took it upon ourselves to see if those ‘feel good’ messages were based in fact or were just holiday hype. Rather than take the word of CE company CEOs or calculating endless sales figures, we took the top 10 ‘electronic circuit’ component exporting countries and looked at where they are in terms of COVID-19 infection rates. This is not a detailed comparison, just a visual look at where each of the top CE exporting countries is relative to COVID-19 cycles. The charts shown the number of new cases per million population and while the starting dates for each are not always the same (depending on when they started reporting) the endpoints are all 11/18/21. Export data is from 2020..
The top three countries represent 50.3% of the total value of circuit component shipments last year, and while each has seen COVID-19 spikes over the last 22 ½ months, they all are seeing small numbers of new cases. While this should be associated with improving production and increasing exports, these countries take draconian measures when even small outbreaks are discovered. This tends to be local, but well enforced, which can have an effect on particular production sites, but is far better than the broad travel restrictions found in countries where the virus is far less under control.
After the top three, things begin to deteriorate, with Singapore, South Korea, the US, and Vietnam still battling recent peaks or increasing cases, while Malaysia, Japan, and the Philippines have come off of the spikes caused by the Delta variant during the summer. As we have noted recently, the recent Delta variant outbreak in Vietnam, where only 38.5% of the population is fully vaccinated, has been particularly intense, with factories in Ho Chi Minh City having been closed or working at low production levels for weeks at a time. In comparison, 59.4% of the Hong Kong population is fully vaccinated and 67.96% have at least one dose.
While we don’t fully subscribe to the “We’ve got this under control” advertising, we do see some reasons to be optimistic, at least for the electronic component part of the global CE supply chain, but as the top 15 regions make up 97.7% of electronic circuit component exports, it is not only important that these regions see improving prospects going into 2022, but that the overall global consuming population also see pressure from COVID-19 wane. Many of the countries on the top 10 list are also major CE product buyers, but a recovery in the global population is also necessary for a real CE recovery to be sustained. 41.4% of the global population is fully vaccinated and 52.6% have received at least one shot. Most epidemiologists believe herd immunity becomes a reality when at least 70% of the global population has been vaccinated.
The top three countries represent 50.3% of the total value of circuit component shipments last year, and while each has seen COVID-19 spikes over the last 22 ½ months, they all are seeing small numbers of new cases. While this should be associated with improving production and increasing exports, these countries take draconian measures when even small outbreaks are discovered. This tends to be local, but well enforced, which can have an effect on particular production sites, but is far better than the broad travel restrictions found in countries where the virus is far less under control.
After the top three, things begin to deteriorate, with Singapore, South Korea, the US, and Vietnam still battling recent peaks or increasing cases, while Malaysia, Japan, and the Philippines have come off of the spikes caused by the Delta variant during the summer. As we have noted recently, the recent Delta variant outbreak in Vietnam, where only 38.5% of the population is fully vaccinated, has been particularly intense, with factories in Ho Chi Minh City having been closed or working at low production levels for weeks at a time. In comparison, 59.4% of the Hong Kong population is fully vaccinated and 67.96% have at least one dose.
While we don’t fully subscribe to the “We’ve got this under control” advertising, we do see some reasons to be optimistic, at least for the electronic component part of the global CE supply chain, but as the top 15 regions make up 97.7% of electronic circuit component exports, it is not only important that these regions see improving prospects going into 2022, but that the overall global consuming population also see pressure from COVID-19 wane. Many of the countries on the top 10 list are also major CE product buyers, but a recovery in the global population is also necessary for a real CE recovery to be sustained. 41.4% of the global population is fully vaccinated and 52.6% have received at least one shot. Most epidemiologists believe herd immunity becomes a reality when at least 70% of the global population has been vaccinated.
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