TrendForce revises view of Covid-19’s impact on end-markets
The market watcher has shaved between 1 million and 3 million units off its estimates for 1Q20 shipments for each of TVs, notebook computers, monitors, smartphones and automobiles.
Problems for the television market started in China with demand reduction caused by lockdown and quickly moved into disruption of the supply chain. The situation is now improving in China but is accelerating in Europe and the US. A global recession is set to impair consumer confidence.
TrendForce has now reduced its projection for TV shipments in 1Q20 to 44.6 million units, down from 46.6 million units given three weeks ago and down from 48.8 million units given pre-Covid-19.
The postponement of both the UEFA European football championships and the Tokyo Olympic games until 2021 takes away a couple of reasons people might have had for buying televisions.
TrendForce has therefore lowered its full year 2020 TV shipment forecast to 205.2 million units, a 5.8 percent decrease YoY. This figure is also 6.7 percent lower than TrendForce’s pre-pandemic forecast.
There is probably more downside depending on how the virus progresses in Europe and the US, TrendForce said.
TrendForce notes that most of the top six notebook computer manufacturers are based in China but that Europe and the US account for 50 percent of the market.
The company has decreased its view of 1Q20 notebook computer shipments to 27.9 million, down from 30.7 million a few weeks ago and down by 20.3 percent from 35 million units figure given pre-Covid-19.
Some purchasing may return towards the back-end of the year around Thanksgiving and Christmas holiday seasons but TrendForce has reduced its 2020 notebook shipment forecast from pre-pandemic levels of 162.4 million units to 156.7 million units, down by 3.5 percent.
Next: Smartphones, automobiles
The impact of Covid-19 on the smartphone market is mainly on the demand side, TrendForce reckons. It is easy for consumers to lengthen the replacement cycle and they will probably do so by a year or more. This will reduce smartphone ASPs and could have a dramatic impact on the vendor landscape and market shares.
The total worldwide smartphone production volume in 2020 is now projected to reach 1.29 billion units, a drop of 7.8 percent from 2019.
TrendForce states that a financial crisis caused by the pandemic could surpass that of 2007-2008 and that the 2H20 could be weaker than the 1H20 as the pandemic is unlikely to be brought under control in the 2Q20. For this reason, TrendForce said, it is not ruling out further contractions of smartphone demand.
As the pandemic has spread European and North American automobile plants have been shut down starting from around mid-March. These shutdowns have been called for one or two weeks initially while manufacturers decide on future developments but restarting may prove harder that the initial shutdown.
Due to the nature of the market and a stock market crash triggered in part by the Russia-Saudi Arabia oil price war much of that demand will have been deferred and some eliminated altogether, TrendForce said.
Global automobile sales in 1Q20 are now expected to be 17.2 million down from 19.3 million figure given three weeks ago and it expects the full year to be down 24 percent year-on-year.
Consumer electronics end-product shipment forecast (millions of units) for 1Q20. Source: TrendForce
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