Covid economy: How damaged are we?

Written by Junko Yoshida for EETIMES – How seriously has the global Covid virus infected the electronics industry? Six months since the pandemic touched all corners of the world is a good time to assess the depth and width of the damage done. One question looms large in the minds of many semiconductor vendors: How long will it take for global market demand to recover and for the supply chain to revive?

EE Times sat down with two Yole Développement experts, analyst Eric Mounier and Guillaume Assogba, an economist who oversees Yole’s macroeconomics research.

In their broad-brush assessment, the semiconductor industry has weathered the pandemic OK — thus far.

Given that electronics is ubiquitously used in many devices including industrial, medical and communication products, most semiconductor devices — ranging from DRAM, NAND and CMOS image sensors to Bio MEMS, computing hardware for high performance computers, cloud and gaming — have seen “little to no impact,” according to Yole.

But there is one inescapable fact: The pandemic has devastated the global demand for travel.

The mobility sector — civil aviation and automotive — has gone into paralysis. Electronics devices serving these markets are severely affected, and their market recovery is likely to take years. The demand has clearly slowed for electronics devices that include radar, sensing and computing devices for advanced driver-assistance systems (ADAS), GaAs (6-inch wafer) and application processing units.
However, doing a technology-by-technology or device-by-device market analysis might well overlook the emergence of a potentially huge macro-economic impact.

Yole economist Assogba pointed out that not just the electronics industry, but many economists are struggling to forecast how the market will recover from this recession. We’ve heard from economists who draw the shape of the Covid-19 recession as a V, U, W or L. This alphabet soup proves just one conclusion: nobody really knows.

Why is this forecast so hard? Perhaps because the world has never experienced the double whammy of a “demand shock” and a “supply shock” at the same time, Assogba explained.

He noted, “Simultaneous negative supply and demand shocks on the economy” are making conventional supply and demand curves move. That shifted equilibrium is forcing everyone into uncharted territory in the global market… Full story