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Chinese device brands such as Lenovo, Xiaomi to see manufacturing, sales delays due to coronavirus

  • The supply chain issues in the tech sector are just part of a bigger economic problem for China as a result of the coronavirus outbreak

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Men work at an assembly line in a factory of telecoms giant Huawei in Dongguan, Guangdong province, China, 2019. Photo: EPA-EFE

Chinese device brands such as Lenovo, Xiaomi and Oppo are likely to face operating issues as the spread of the new coronavirus leads to manufacturing delays at factories and the temporary closure of retail stores.

The deadly coronavirus, which originated in the city of Wuhan in Hubei province and has since infected over 20,000 and killed over 400, has led China to extend the Lunar New Year holiday and enforce mandatory factory shutdowns from January 31 to February 9 in an effort to contain the outbreak.

For smartphone companies in China, the suspension of factory operations could lead to a snag in manufacturing processes and even supply shortages, according to analysts. This is especially so for companies who rely on factories and components in the province of Hubei – ground zero of the outbreak – where many cities are currently under lockdown.

“Companies which rely on components from Hubei will be the most impacted, such as Lenovo,” said Canalys vice-president of mobility Nicole Peng. “For companies like Huawei, whose operations are in Guangdong, the situation is less severe, although no company right now will be able to resume factory operations at 100 per cent capacity.”

The longer factories are unable to resume operations, the larger the impact and uncertainty, said Peng. This would make it difficult for brands and manufacturers to implement business planning. The supply chain issues in the tech sector are just part of a bigger economic problem for China as a result of the coronavirus outbreak, with Wuhan an industrial powerhouse for the steel, semiconductors and automotive sectors.

“Uncertainty is going to bring the biggest damage to [these companies],” she said.

Minghe Hu
Minghe Hu joined the Post in 2019 covering artificial intelligence and science in China. She graduated from Medill School of Journalism at Northwestern University.
Jane Zhang joined the Post in 2017, working with the video team before moving to reporting. She covers business and political stories in Hong Kong and mainland China. Previously, Jane interned at CNN and Bloomberg Businessweek Chinese.
Zen Soo
Zen Soo worked at the Post from 2015 until 2019. She covered China technology, in particular e-commerce, online to offline and mobile payments. She also wrote about Southeast Asian tech companies.
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