The coronavirus outbreak in China is disrupting the global technology sector (hardware, electronic manufacturing services providers and semiconductor companies), as operations in the world’s largest technology manufacturing hub are threatened, said Standard and Poor’s (S&P) report on Thursday.
In a report “Coronavirus A Wide-Ranging Ill For Tech Supply Chain”, S&P said it expects the virus will be contained globally in March 2020 (no new transmissions in April), allowing travel and other restrictions to be unwound by the middle of the second quarter.
According to the report, the factories are expected to reopen in February and the near term negative impact to the technology sector can be reversed later.
“However, if the outbreak proves more difficult to contain, the effect on the tech sector could be extensive as lengthy factory shutdowns or significant underutilization could materially lower the global output of tech components, sub-assemblies, or finished goods,” S&P statement said.
“We haven’t taken any rating actions related to the outbreak, S&P Global Ratings analysists David T. Tsui, Raymond Hsu, and Mark Habib said in the report.