Electronics Production Outlook in the Wake of COVID-19
The Chip Insider® ForecastPro
May 8, 2020
Worldwide electronics sales are now expected to fall nearly 5% in 2020, down from our previous forecast of +4%. The downgrade is a result of the COVID-19 pandemic which is having an adverse impact on the electronics supply chain and end-demand. The world GDP (in terms of purchasing power parity) is expected to decelerate to 1% from 5% in 2019. Given the strong correlation between worldwide GDP and electronics, the drop in electronics sales should come as no surprise.
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Electronics Production Outlook Changes Since Last Forecast
The outlook has changed dramatically since December 2019 due to COVID-19's spread to a global pandemic
WGDP is collapsing from COVID-19 related shutdowns
Demand is dropping as populations get stay-in-place or quarantine orders throughout the world
2Q GDP growth projections in U.S. are settling to -15%
One thing is clear: consumer, industrial, and service demand is dropping dramatically short-term
We expect Electronics demand to drop in the wake of WGDP collapse
All electronics segments have downgrades from previous forecast
Overall Electronics changing from +6% to -5%
This is the single largest forecast change in last three years for VLSI
The largest changes usually correspond to large business disruptions such as 2009 financial crisis