Archive for ‘Supply chain’

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02/05/2020

Xi Focus: Xi endorses workers driving China’s new growth

People work at a construction site of a utility tunnel in Wuhan, central China’s Hubei Province, April 30, 2020. (Xinhua/Xiao Yijiu)

BEIJING, May 1 (Xinhua) — China is getting the world’s largest workforce back to work as the nationwide battle against COVID-19 has secured major strategic achievements.

The unprecedented fight has nurtured new trends in the workplace. For example, more attention is being paid to public health and e-commerce to boost consumption and emerging sectors brought by new applications based on the country’s rapid new infrastructure development of 5G networks and data centers.

In this aerial photo taken on April 29, 2020, representatives of frontline health workers fighting COVID-19 attend a bell-ringing ceremony at the Yellow Crane Tower, or Huanghelou, a landmark in Wuhan, central China’s Hubei Province. (Xinhua/Xiao Yijiu)

ANGELS OF PUBLIC HEALTH

Ye Man, head nurse of gastrointestinal department of Hubei General Hospital East District, one of the five remaining COVID-19 designated hospitals in Wuhan, is taking her first weeklong vacation since January.

The 34-year-old mother of two started to take a week off on Monday, one day after her hospital cleared all remaining confirmed COVID-19 patients. The  nine ICU wards in her hospital had been kept occupied over the past several months.

Friday marked International Workers’ Day, and the start of China’s five-day public holiday. Ye said she planned to visit urban parks with her family during the holiday.

At her busiest point, she and her colleagues took care of a ward filled with 40 COVID-19 patients.

“It was a really tough time,” she recalled. She had to wear a protective gown and a mask for nine hours a day and be separated from her family to avoid possible cross-infections.

Wuhan, capital of central China’s Hubei Province and once hard hit by COVID-19, cleared all confirmed cases in hospitals on April 26. Over 42,000 medical workers mobilized nationwide to aid Hubei have contributed to achieving a decisive outcome in the fight to defend Hubei and Wuhan.

In an inspection tour to Wuhan on March 10, President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, lauded medical workers as “the most beautiful angels” and “messengers of light and hope.”

To reward brave and dedicated medics, major tourist sites in Hubei are offering free entry to medical staff over the following two years.

Chinese President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, learns about development of the black fungus industry in Jinmi Village of Xiaoling Township in Zhashui County, Shangluo City, northwest China’s Shaanxi Province, April 20, 2020. (Xinhua/Xie Huanchi)

LIVESTREAMING ANCHORS

“We have a new batch of supplies today. Those who did not get the goods should hurry to buy now,” said Li Xuying, a livestreaming anchorwoman selling agaric mushrooms in Zhashui, a small county deep in the Qinling Mountains in northwest China’s Shaanxi Province.

Li has been prepared for a boom of online shopping in the holiday, because online buyers rushed to her livestreaming website to place orders, after Xi inspected the county and chatted with her in the village of Jinmi during a recent tour to Shaanxi.

“I used to sell goods worth about 50,000 yuan (7,070 U.S. dollars) on average after a six-hour livestreaming session. Now the sales are 10 times that,” she said.

Li was one of the 10 sales staff sent by the local agricultural e-commerce firm to Chinese e-commerce platform Taobao’s headquarters for livestreaming training. She said livestreaming is effective in bridging buyers and farmers, through which viewers can watch planting and harvesting online.

With the number of netizens in China reaching 904 million in March, e-commerce has been one of the popular means of promoting the sale of farm produce and helping farmers shake off poverty. Despite the impact of COVID-19, the country is determined to eradicate absolute poverty by the end of this year.

Workers work at the construction site of a 5G base station at Chongqing Hi-tech Zone in Chongqing, southwest China, April 15, 2020. (Xinhua/Wang Quanchao)

HI-TECH WORKERS IN “NEW INFRASTRUCTURE” BUILDING

As an elasticity calculation engineer of Alibaba Cloud, Zhao Kun and his colleagues always stay on alert for high data flow, for example, brought by the anticipated online shopping spike during the holiday.

“The profession, which may sound obscure, is actually closely connected to everyone’s life, as cloud computing is the infrastructure supporting high-tech applications of artificial intelligence and blockchain,” said Zhao.

The Chinese leadership has underscored expediting “new infrastructure” development to boost industrial and consumption upgrading and catalyze new growth drivers.

Seizing the opportunities of industrial digitization and digital industrialization, China needs to expedite the construction of “new infrastructure” projects such as 5G networks and data centers, and deploy strategic emerging sectors and industries of the future including the digital economy, life health services and new materials, President Xi has said.

During the epidemic, Zhao and his colleagues expanded more than 100,000 cloud servers to ensure the stable operation of “cloud classrooms” and “cloud offices” for millions of people working and studying from home.

In the “new infrastructure” building, people like Zhao contribute to constructing the virtual infrastructure of an ecosystem, which enables e-commerce, e-payment, online teaching and the digital transformation of manufacturing and supply chain management.

In early April, China released a plan on promoting the transformation of enterprises toward digitalization and intelligence by further expanding the application of cloud and data technologies, to nurture new business models of the digital economy.

Source: Xinhua

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28/04/2020

China discounts, cheaper iPhone to cushion Apple from virus blow to demand

SHANGHAI (Reuters) – Apple Inc’s (AAPL.O) discounts on the iPhone 11 in China and the release of a new low-price SE model have put the company in a better position than rivals to weather a coronavirus-related plunge in global smartphone demand.

While China, which accounts for roughly 15% of Apple’s revenue, appears to be a rare bright spot, investors will be keen to get a picture of global demand when the Cupertino, California-headquartered company reports second-quarter results on Thursday.

The iPhone maker has shut retail stores in the United States and Europe following the COVID-19 outbreak, and China is the only major market where it has been able to reopen all shops.

Consumer spending is expected to be muted as the pandemic has crippled economies and Apple, the world’s second-most valuable tech company, is better armed with the launch of its new price-conscious iPhone model, analysts said.

“Apple is better positioned than most to experience a rapid recovery in a post COVID world,” Evercore analyst Amit Daryanani said in a research note. “We see demand as pushed out, not canceled.”

He added that the launch of the $399 iPhone SE suggested that Apple’s supply chain was getting back on its feet after weeks of shutdown earlier this year.

Analysts expect Apple to report a 6% drop in revenue and an 11% fall in net income in its fiscal second quarter, according to Refinitiv data.

On the other hand, Chinese brands such as Oppo and Vivo who have steadily moved to offer high-end models to challenge iPhones, stand to lose marketshare as bargain hunters choose Apple.

Earlier this month, several online retailers in China slashed prices of the iPhone 11 by as much as 18% – a tactic Apple has used in the past to boost demand. And while initial social media reaction to the new iPhone SE was muted, analysts said they were seeing a pick up in demand.

The cheaper iPhone SE could tempt iPhone owners to opt for a newer device, something they might have otherwise delayed in a weak economy, said Nicole Peng, who tracks the smartphone sector at research firm Canalys.

“People want to avoid uncertainty in a downturn,” she said. “Having a brand like Apple that can showcase quality and make people less worried about breakdowns or after-sales service can bring in buyers.”

CHEAP IS GOOD

Early data suggests that the Chinese smartphone market is recovering rapidly in the aftermath of the virus, and Apple has emerged relatively unscathed.

Sales of iPhones in China jumped 21% last month from a year earlier and more than three fold from February, government data showed, meaning March-quarter sales in the country were likely to have slipped just 1%.

To be sure, a recovery in Chinese demand won’t offset sales lost in the United States and Europe. And the company is yet to launch a smartphone enabled with 5G wireless technology like those offered by Asian rivals, a disadvantage for Apple so far.

But those same expensive 5G models may not sell well in the current climate of frugality, analysts said.

“If there are no massive subsidies (in China), I doubt there will be many smartphone users who will be eager to upgrade to 5G,” said Linda Sui, who tracks the smartphone sector at research firm Strategy Analytics.

Sui expects iPhone shipments in 2020 to be down 2 percentage points at the most, versus double digit declines at Chinese firms.

Apple also has revenue from its services business to fall back on. It has leveraged its large iPhone customer base to boost services revenue from music, apps, gaming and video.

“Apple’s Services segment should remain resilient in today’s work-from-home environment, thereby demonstrating the durability of Apple’s model,” Cowen analyst Krish Sankar said.

Source: Reuters

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20/04/2020

India coronavirus lockdown: What stays open and what stays shut

An empty stretch of the road and Delhi Police barricades to screen commuters during lockdown, at Delhi Gate on April 16, 2020 in New Delhi, India.Image copyright GETTY IMAGES
Image caption An empty stretch of the road and Delhi Police barricades to screen commuters during lockdown, at Delhi Gate on April 16, 2020 in New Delhi, India.

India has eased some restrictions imposed as part of a nationwide lockdown to curb the spread of the coronavirus.

Most of the new measures are targeted at easing pressure on farming, which employs more than half the nation’s workforce.

Allowing farms to operate again has been seen as essential to avoid food shortages.

But some other measures announced last week, will not be implemented.

This includes the delivery of non-essential items such as mobile phones, computers, and refrigerators by e-commerce firms – the government reversed its decision on that on Sunday.

And none of the restrictions will be lifted in areas that are still considered “hotspots” for the virus – this includes all major Indian cities.

Domestic and international flights and inter-state travel will also remain suspended.

So what restrictions are being eased?

Most of the new measures target agricultural businesses – farming, fisheries and plantations. This will allow crops to be harvested and daily-wagers and others working in these sectors to continue earning.

To restore the supply chain in these industries, cargo trucks will also be allowed to operate across state borders to transport produce from villages to the cities.

Essential public works programmes – such as building roads and water lines in rural areas – will also reopen, but under strict instructions to follow social distancing norms. These are a huge source of employment for hundreds of thousands of daily-wage earners, and farmers looking to supplement their income.

Banks, ATMs, hospitals, clinics, pharmacies and government offices will remain open. And the self-employed – such as plumbers, electricians and carpenters – will also be allowed to work.

Some public and even private workplaces have been permitted to open in areas that are not considered hotspots.

But all businesses and services that reopen are expected to follow social distancing norms.

Who decides what to reopen?

State governments will decide where restrictions can be eased. And several state chief ministers, including Delhi’s Arvind Kejriwal, have said that none of the restrictions will be lifted in their regions.

Mr Kejriwal said the situation in the national capital was still serious and the decision would be reviewed after one week.

India’s most populous state, Uttar Pradesh, will also see all restrictions in place, as will the southern states of Andhra Pradesh, Telangana and Karnataka.

The southern state of Kerala, which has been widely acknowledged for its success in dealing with the virus, has announced a significant easing of the lockdown in areas that it has demarcated as “green” zones.

This includes allowing private vehicular movement and dine-in services at restaurants, with social distancing norms in place. However, it’s implementing what is known as an “odd-even” scheme – private cars with even and odd number plates will be allowed only on alternate days, to limit the number of people on the road.

Source: The BBC

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10/04/2020

Chinese vice premier talks with British finance minister on bilateral cooperation

BEIJING, April 9 (Xinhua) — Chinese Vice Premier Hu Chunhua held a phone conversation on Thursday with British Chancellor of the Exchequer Rishi Sunak on advancing bilateral cooperation on epidemic prevention and economic development.

Hu, who leads the Chinese delegation to the China-UK Economic and Financial Dialogue (EFD), noted that Chinese President Xi Jinping and British Prime Minister Boris Johnson recently held two phone conversations and reached important consensus on jointly dealing with the pandemic and developing China-UK relations.

The Chinese side stands ready to work with the British side to implement the consensus reached by the two leaders, deepen practical cooperation in such fields as epidemic prevention and finance, and provide Britain with support and assistance within its capabilities in medical supplies and other fields, Hu said.

The vice premier expressed hope that the two sides will further strengthen cooperation under the framework of the United Nations and the Group of 20, promote macroeconomic policy coordination, cut tariff, remove barriers, and facilitate the flow of trade, so as to maintain the stability of the global industrial supply chain and promote sustainable growth of the world economy.

For his part, Sunak thanked China for its support and assistance, adding that Britain stands ready to strengthen bilateral cooperation in epidemic prevention, economy and finance through channels like the China-UK EFD, so as to continuously advance bilateral relations.

Source: Xinhua

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05/04/2020

As Trump administration debated travel restrictions, thousands streamed in from China

(Reuters) – In defending his strategy against the deadly coronavirus, President Donald Trump repeatedly has said he slowed its spread into the United States by acting decisively to bar travelers from China on Jan. 31.

“I was criticized by the Democrats when I closed the Country down to China many weeks ahead of what almost everyone recommended. Saved many lives,” he tweeted, for instance, on March 2.

But Reuters has found that the administration took a month from the time it learned of the outbreak in late December to impose the initial travel restrictions amid furious infighting.

During that time, the National Security Council staff, the state department and other federal agencies argued about everything from how best to screen for sick travelers to the economic impact of any restrictions, according to two government officials familiar with the deliberations.

The NSC staff ultimately proposed aggressive travel restrictions to high-level administration officials – but it took at least a week more for the president to adopt them, one of the government officials said.

In meetings, Matthew Pottinger, deputy national security adviser and a China expert, met opposition from Treasury Secretary Steven Mnuchin and National Economic Council director Larry Kudlow, said two former NSC officials and one of the government officials involved in the deliberations. The two top aides were concerned about economic fallout from barring travelers from China, the sources said.

Each day that the administration debated the travel measures, roughly 14,000 travelers arrived in the United States from China, according to figures cited by the Trump administration. Among them was a traveler who came from Wuhan to Seattle in mid-January, who turned out to be the first confirmed case in the United States.

On Jan. 22, Trump downplayed the threat posed by the virus, telling CNBC from the World Economic Forum in Davos, Switzerland, “We have it totally under control.”

The battle within the White House over whether and how to stop infected travelers from China lasted nine more days.

On Jan. 31, Trump issued a proclamation barring entry of non-U.S. citizens, other than the immediate family of citizens and permanent residents, who had traveled to China within the last two weeks. The restrictions have since been expanded to many other countries.

It is unclear when the president was made aware of the NSC’s proposal and what prompted his decision to act, but the decision followed the World Health Organization’s declaration the day before that the epidemic was a “public health emergency of international concern.”

U.S. Centers for Disease Control and Prevention officials told Reuters that they contributed to the decision as part of the administration’s newly convened coronavirus task force.

A Treasury Department spokesperson said that Mnuchin “never objected to the decision to restrict flights from China.”

A White House spokesman, Judd P Deere, said: “Any suggestion that Larry Kudlow objected to restricting flights from China to contain COVID-19 and protect the health of the American people is completely false. Larry fully supported the President’s bold decision.”

In a statement, NSC spokesman John Ullyot said that the council’s early meetings about the coronavirus involved great expertise and robust discussion and were professional.

As of April 4, the coronavirus has infected more than 300,000 people in the United States, and killed over 8,000, according to the Reuters coronavirus tracker. The country has more cases than anywhere else in the world.

The sources for this story, former NSC members, public health officials and others involved in, or briefed on, the administration’s response, spoke on condition of anonymity because they were not authorized to comment on the record.

POPPING A FLARE

The NSC, which operates within the White House to coordinate policies and recommendations involving national security across agencies, was at the center of the effort to formulate the early response to the outbreak.

The council was first notified of the outbreak on the morning of Dec. 31, according to one of the government officials involved, when an NSC official was forwarded an email from a Department of Health and Human Services (HHS) attache in Beijing that had been sent to senior HHS officials the night before.

The “pop-a-flare” notice, as it is known, described strange cases of pneumonia that could not be definitively traced to seasonal flu, said the government official, who saw the message. The email said the Chinese would soon be notifying the World Health Organization, the official said.

On Jan. 3, Dr. Gao Fu, head of China’s disease control agency, informed his U.S. counterpart, Dr. Robert Redfield, director of the CDC, in an emotional telephone call that the outbreak was growing out of control, according to the same federal official and a former NSC official. Both said they had been informed of the details.

Gao’s agency did not respond to a request for comment.

Ullyot, the NSC spokesman, disputed the timeline, saying the council did not learn of the coronavirus outbreak until Jan. 3. The CDC, a part of HHS, confirmed to Reuters that it learned of an outbreak in late December and that the call with Gao occurred Jan. 3.

Health agencies were scrambling to gather information, the two government officials involved in the deliberations said. Questions went back to the U.S. Embassy in Beijing, and experts across the government: How many travelers arrive daily from Wuhan, China, the initial site of the outbreak? What U.S. airports do they fly into? What would be the pros and cons, including costs, of any travel restriction?

In discussions with the NSC, public health officials, including from HHS and CDC, initially argued for the targeted approach of medically screening travelers from Wuhan, as they sifted through information about where and how quickly the virus was spreading, one of the government officials involved said. Public health officials tend not to favor border closures because they can restrict medical response and divert limited resources.

The NSC’s Pottinger was pushing hard for strict travel restrictions – expressing doubt about the truth of the data China was releasing, according to the official.

There was “a lot of yelling, a sign of frustration,” said a former NSC staffer who was not in the meetings but got messages from colleagues in attendance expressing dismay. The person described the messages but did not share them with Reuters. The two current federal officials confirmed the acrimony.

The NSC struggled to reconcile conflicting viewpoints, the two government officials involved said.

The debate delayed the screening of travelers from China by at least a week, one of the officials said. CDC officials ultimately announced enhanced medical screenings for travelers from Wuhan at three international airports, in Los Angeles, San Francisco and New York’s John F. Kennedy, on Jan. 17, expanding them to 20 U.S. airports by Jan. 28.

At one point, during a meeting, Pottinger snapped at health officials that their approach “really has to take a step back,” so that national security interests could shape the response, the official said.

The CDC declined to comment on the debate.

Some former NSC officials who spoke to Reuters traced what they saw as an ineffective response by the council in part to structural changes in 2018 in which former National Security adviser John Bolton had folded the council’s Global Health Security and Biodefense directorate into a larger operation, with the result that pandemic planning was not as great a priority. Others said that, under Bolton, the NSC worked effectively on biopreparedness, but after he departed it lost a number of important experts.

NSC spokesman Ullyot rejected as false the suggestion that the council lacked expertise. The council is staffed by officials with “extensive experience in virology, infectious disease epidemiology, global health security, public health, and emergency response,” he said.

The NSC’s own public health experts were involved in the discussions from the beginning, advocating “early and often” for traveler screening and raising the issue of banning flights from Wuhan, he said.

While the conflict soured the interactions, one of the government officials involved said, data soon emerged that led the health agency officials to agree with Pottinger: A travel restriction for all of China was needed. They saw that there were thousands of travelers arriving daily from Wuhan’s Hubei province to the United States, as well as a rising number of Covid-19 cases reported by the Chinese government beginning in mid-January, the source said.

In its statement to Reuters, the CDC did not directly address what led to its ultimate decision to support the travel restrictions.

By Jan. 24, the staff of the NSC had proposed restricting flights from China, said the government official involved in the deliberations. But as Pottinger met with deputies from other cabinet-level agencies, the recommendation met with resistance because of concerns about spooking the markets and scaring the public, three sources with knowledge of the deliberations told Reuters.

STILL DIVIDED

With opinions still divided, the matter went to top White House aides, at which point Treasury Secretary Mnuchin and National Economic Council director Kudlow argued strongly against the travel restrictions, said two former NSC officials and the government official involved in the deliberations.

In addition to the impact on the stock market, the two top aides expressed concern about the supply chain for everything from semiconductors to ingredients for pharmaceuticals, said one of the government officials involved in the deliberations.

Pottinger was “pleading with Mnuchin and others” to stop travelers from coming, the former NSC official said.

By then, the first known patient in the United States – a man in his 30s who had traveled from Wuhan to Seattle on Jan. 15 – tested positive for the coronavirus disease, COVID-19.

He had slipped through travel screenings because his trip had been broken up, so the Wuhan origin of his trip had not been obvious to customs agents, said the government official with knowledge of the deliberations.

At the World Economic Forum in Davos, Switzerland, President Trump told CNBC on Jan. 22: “It’s one person coming in from China, and we have it under control. It’s going to be just fine.”

On Jan. 29, the Council of Economic Advisers, which advises the president on economic policy, presented an analysis describing a worst-case scenario of what a pandemic and travel restrictions could do to the economy, according to one of the government officials involved in the deliberations, who read it. The report supported Kudlow and Mnuchin’s arguments against such restrictions and “scared everyone,” the source said.

The next day, at an afternoon meeting of the White House’s newly formed coronavirus task force, as well as other attendees, travel restrictions were still being debated, according to the government official involved in the deliberations and a former NSC official who learned of the meeting from former colleagues.

During the meeting, Mick Mulvaney, then President Trump’s chief of staff, entered the room, telling a smaller group, including Pottinger: “The president wants to see you now,” according to the official involved in the deliberations and the former NSC officials.

Mulvaney referred questions to the White House, which did not respond.

Trump issued the order the next day. By then, the novel coronavirus was already carving a lethal path through a Seattle nursing home.

Source: Reuters

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29/03/2020

China guards against second wave of coronavirus coming from abroad

WUHAN, China (Reuters) – The growing number of imported coronavirus cases in China risked fanning a second wave of infections at a time when “domestic transmission has basically been stopped”, a spokesman for the National Health Commission said on Sunday.

“China already has an accumulated total of 693 cases entering from overseas, which means the possibility of a new round of infections remains relatively big,” Mi Feng, the spokesman, said.

In the last seven days, China has reported 313 imported cases of coronavirus but only 6 confirmed cases of domestic transmission, the commission’s data showed.

There were 45 new coronavirus cases reported in the mainland for Saturday, down from 54 on the previous day, with all but one involving travelers from overseas.

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  • China says imported virus cases raise risk of new infection wave

Most of those imported cases have involved Chinese returning home from abroad.

Airlines have been ordered to sharply cut international flights from Sunday. And restrictions on foreigners entering the country went into effect on Saturday.

Five more people died on Saturday, all of them in Wuhan, the industrial central city where the epidemic began in December. But Wuhan, the capital of Hubei province, has reported only one new case on the last 10 days.

A total of 3,300 people have now died in mainland China, with a reported 81,439 infections.

Saturday marked the fourth consecutive day that Hubei province recorded no new confirmed cases. The sole case of domestically transmitted coronavirus was recorded in Henan province, bordering Hubei.

With traffic restrictions in the province lifted, Wuhan is also gradually reopening borders and restarting some local transportation services.

“It’s much better now, there was so much panic back then. There weren’t any people on the street. Nothing. How scary the epidemic situation was,” a man, who gave his surname as Hu, told Reuters as he ventured out to buy groceries in Wuhan.

“Now, it is under control. Now, it’s great, right?”

All airports in Hubei resumed some domestic flights on Sunday, with the exception of Wuhan’s Tianhe airport, which will open to domestic flights on April 8. Flights from Hubei to Beijing remain suspended.

A train arrived in Wuhan on Saturday for the first time since the city was placed in lockdown two months ago. Greeting the train, Hubei Communist Party Secretary Ying Yong described Wuhan as “a city full of hope” and said the heroism and hard work of its people had “basically cut off transmission” of the virus.

More than 60,000 people entered Wuhan on Saturday after rail services were officially restarted, with more than 260 trains arriving or travelling through, the People’s Daily reported on Sunday.

On Sunday, streets and metro trains were still largely empty amid a cold rainy day. Flashing signs on the Wuhan Metro, which resumed operations on Saturday, said its cars would keep passenger capacity at less than 30%.

The Hubei government on Sunday said on its official WeChat account that a number of malls in Wuhan, as well as the Chu River and Han Street shopping belt, will be allowed to resume operations on March 30.

Concerns have been raised that a large number of undiagnosed asymptomatic patients could return to circulation once transport restrictions are eased.

China’s top medical adviser, Zhong Nanshan, played down that risk in comments to state broadcaster CCTV on Sunday. Zhong said asymptomatic patients were usually found by tracing the contacts of confirmed cases, which had so far shown no sign of rebounding.

With the world’s second-biggest economy expected to shrink for the first time in four decades this quarter, China is set to unleash hundreds of billions of dollars in stimulus.

The ruling Communist Party’s Politburo called on Friday for a bigger budget deficit, the issuance of more local and national bonds, and steps to guide interest rates lower, delay loan repayments, reduce supply-chain bottlenecks and boost consumption.

Source: Reuters

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23/03/2020

Home work triggers demand jump for chips, laptops and network goods

SEOUL/TOKYO (Reuters) – With more employees working from home to help slow the spread of the coronavirus, demand is surging for laptops and network peripherals as well as components along the supply chain such as chips, as companies rush to build virtual offices.

Many firms have withdrawn earnings forecasts, anticipating a drop in consumer demand and economic slump, but performance at electronics retailers and chipmakers is hinting at benefits from the shift in work culture.

Over the past month, governments and companies globally have been advising people to stay safe indoors. Over roughly the same period, South Korea – home of the world’s biggest memory chip maker, Samsung Electronics Co Ltd – on Monday reported a 20% jump in semiconductor exports.

Pointing to further demand, nearly one in three Americans have been ordered to stay home, while Italy – where deaths have hit 5,476 – has banned internal travel. Worldwide, the flu-like virus has infected over 300,000 people and led to almost 15,000 deaths since China first reported the outbreak in December.

“With more people working and learning from home during the outbreak, there has been rising demand for internet services … meaning data centres need bigger pipes to carry the traffic,” said analyst Park Sung-soon at Cape Investment & Securities.

A South Korean trade ministry official told Reuters that cloud computing has boosted sales of server chips, “while an increase in telecommuting in the United States and China has also been a main driver of huge server demand.”

In Japan, laptop maker Dynabook reported brisk demand which it partly attributed to companies encouraging teleworking. Rival NEC Corp said it has responded to demand with telework-friendly features such as more powerful embedded speakers.

Australian electronics retailer JB Hifi Ltd also said it saw demand “acceleration” in recent weeks from both commercial and retail customers for “essential products they need to respond to and prepare” for the virus, such as devices that support remote working as well as home appliances.

CHINA LEAD

China is leading chip demand, analysts said, as cloud service providers such as Alibaba Group Holding Ltd, Tencent Holdings Ltd and Baidu Inc quickly responded to the government’s effort to contain the virus.

“Cloud companies opened their platforms, allowing new and existing customers to use more resources for free to help maintain operations,” said analyst Yih Khai Wong at Canalys.

“This set the precedent for technology companies around the world that offer cloud-based services in their response to helping organisations affected by coronavirus.”

China’s cloud infrastructure build-up has helped push up chip prices, with spot prices of DRAM chips rising more than 6% since Feb. 20, showed data from price tracker DRAMeXchange.

UBS last week forecast average contract prices of DRAM chips to rise as much as 10% in the second quarter from the first, led by a more than 20% jump in server chips.

It said it expects DRAM chips to be modestly under supplied until the third quarter of 2021, with demand from server customers rising 31% both in 2020 and 2021.

SUPPLY DISRUPTION

Concerns over supply disruption has also contributed to a price rise.

“You’ve got lots of OEMs and systems integrators in the global market who have intense demand for memory now,” said Andrew Perlmutter, chief strategy officer at ITRenew, a company that buys and reworks used data centre equipment for resale.

“Nobody is shutting down their factories – it is still production as normal – but people worry about memory supply in particular, so they want to get out ahead of production.”

About 69% of electronics manufacturers have flagged possible supplier delays averaging three weeks, showed a poll on March 13 by industry trade group IPC International.

Half of those polled expected business to normalise by July, and nearly three-quarters pointed to at least October.

Source:Reuters

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07/02/2020

Most US firms in China expect coronavirus outbreak to hit revenue, survey finds

  • Some companies polled by Shanghai’s American Chamber of Commerce said they were speeding up plans to move operations out of mainland
  • Transport bans and strict public health measures have disrupted economic activity
China’s economic growth may drop to 5 per cent or lower because of the outbreak, according to a government economist. Photo: Bloomberg
China’s economic growth may drop to 5 per cent or lower because of the outbreak, according to a government economist. Photo: Bloomberg
The majority of US firms with operations in China expect a virus outbreak
to cut revenue this year, and some are accelerating plans to shift their supply chains out of the country, according to a poll by Shanghai’s American Chamber of Commerce.
Nearly a quarter of the firms forecast revenue would fall by at least 16 per cent this year due to the outbreak, while over a fifth said it would decline by 11-15 per cent. Only 13 per cent of respondents said revenue would see very little or no impact from the virus.

The survey covered 127 companies, including 20 with China-sourced revenues of over US$500 million and 27 with China revenues of US$100 million to US$500 million.

Sixteen per cent of respondents expected China’s gross domestic product to fall by more than 2 per cent due to the outbreak.

China tries to get back to work amid coronavirus outbreak
The death toll from the virus in China has topped 600, with more than 31,000 people infected. Widespread transport bans and strict public health measures have disrupted economic activity in much of the country, and factory closures are starting to ripple through global supply chains.
China faces dilemma as it tries to get back to work amid coronavirus outbreak fears
7 Feb 2020

A government economist said last week that China’s economic growth may drop to 5 per cent or even lower due to the outbreak, possibly pushing policymakers into introducing more stimulus measures.

Sources said Chinese policymakers were preparing measures, including more fiscal spending and interest rate cuts, amid expectations the outbreak would have a devastating impact on first-quarter growth.

In response to the virus, some survey respondents said they were shifting operations out of China and moving more production to other areas, including India.

“Not innovative, but our suppliers are moving operations to Taiwan. This has been considered before, options and planning were being made, but they are pulling the trigger now,” according to one respondent in the survey.

“Our company will directly source from Taiwan and eliminate the mainland China supply chain for more and more products.”

Source: SCMP

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