Reports: Coronavirus Sending Rippling Damage Throughout Tech Industry

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With a handful of RAM factories in China, DigiTimes reported today that less than 30% of factory employees have returned to work during the coronavirus outbreak. DigiTimes reported today that less than 30% of factory employees have returned to work citing unnamed "sources in the storage industry".

The publication too cited anonymous sources "from the upstream supply chain," claiming that some factories owned by Taiwan-based companies, namely ODM factories in Kunshan, China, saw only about 1,000 of 9,000 employees return to work.

Sources in the RAM supply chain reportedly believe that material stocks "can no longer support their production by mid to late February".

Before the outbreak, the low RAM prices were due to large inventories and typical market fluctuations. Earlier this year there were predictions that DRAM and NAND prices would increase by up to 40% by 2020. However, with the outbreak of the corona virus to the tech industry and the world, the future is uncertain.

In the meantime it has already been reported that consumer demand for graphics cards and motherboards in China has already decreased.

Untitled Digitimes According to sources, Acer and Asus, which have a large customer base in China, are experiencing major setbacks, with Acer's revenues declining 41.8% in January and Asus's 29.1%. These declines were due to a combination of labor shortages in local factories, reduced supply from their supply chain, and reduced demand in local markets.

If the reports are true, it could mean that coronavirus will play an important role in the performance of various technology markets this year.

"With Asustek delivering a large portion of its motherboard, graphics card and gaming notebook shipments to China, the profitability of the Taiwan-based brand is expected to decrease dramatically in the first quarter," said DigiTimes.

"With the shortage of labor and components unlikely to be fully resolved before mid-March, the two Taiwan-based brands may remain weak in the second quarter."

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