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Coronavirus Impacting Tech Industry: Samsung, Foxconn Factories Closed, Travel Restri
The year has barely started and it looks like the Coronavirus is already starting to have a deep impact on the global industry. In tech it's also hitting hard, with various factories in China being forced to close by the government and western companies restricting travel.
For the sake of global and local health, the Chinese government has placed travel restrictions on the city of Wuhan, restricting the movement of people and goods in order to attempt to gain control over the situation. Affected individuals are more strictly quarantined, with strict rules and fines in place to prevent further spread of the disease.
Naturally, with such strict restriction of movement, an effect is bound to be felt in industries. As reported by Zerohedge, the Chinese government has decided to order the closure of the Foxconn and Samsung factories for the next one to two weeks.
In these areas of manufacturing hubs and the city of Wuhan, the local economy is also slowing due to fears of going to restaurants and bars.
Occurring directly after the Chinese new year, some analysts fear that the extended delay in production may just trigger a recession.
Nevertheless, according to MarketWatch, the downtime in China's production may be good for US-based memory producers “With the shutdown of fabs during Chinese New Year this weekend and the impact of the Coronavirus quarantine in Wuhan, any disruption or delay of semi cap equipment support/installs could be negative for equipment suppliers, while any disruption in memory output (if the epidemic worsens after the holiday break) could be positive for memory suppliers outside of China such as Micron, Western Digital and others,” Vijay Rakesh, an analyst at Mizuho, told MarketWatch.
Meanwhile, The Verge also reports that Facebook, Razer and LG are restricting employee travel to China due to the virus. Any Facebook employees returning from China, either for work or personal travel, have been asked to work from home, as reported by Bloomberg.
Exactly how far-reaching the economic effects of the virus will be remains difficult to say, but each day that goes by where more people get infected causes further economic slowdown.
At the time of writing, the death count due to the Coronavirus is at 106 (as reported by the BBC), with the majority occurring in the city of Wuhan, where the epidemic has started. There is currently no known cure for the Coronavirus, though the first victims are said to be elderly or with pre-existing respiratory problems. Currently, there are over 4500 confirmed cases in China alone. Figures elsewhere in the world remain scarce.
