The Impact of COVID-19 on China’s Mobile Phone and Microcomputer Production

According to the National Bureau of Statistics of China, Chinese production of mobile phones is expected to suffer a double-digit decline this year. As reported in Q1 2020, China’s mobile phone production dropped 50% from Q4 2019 and 33% from the year prior as a result of factories being temporarily closed due to the COVID-19 pandemic.

Since these figures have been reported, production has since recovered with Q2 2020 units up 36% from Q1 and Q3 rising 15% from Q2. It is with all of this; however, that even if production in Q4 were to return to the peak of Q4 2019 at 517 million units, total production in 2020 would only be 1,525 million units, down 15% from 2019 as a result. Smartphones have also accounted for about 75% of mobile phone units as it currently stands, with feature phones making up the remaining percentage of production levels. With this data, while there will be a smartphone market decline, the impact will be nowhere as severe as the overall mobile phone decline, as recent forecasts call for a smartphone decline of around 10-11%.

On the contrary, the outlook for Chinese production with respects to microcomputer units is vastly superior than that of mobile phones. In Q1 2020, China reported the production of microcomputer’s dropped 42% from Q4 2019 and 15% from the year before. Yet, production bounced back swiftly in Q2 2020, up not only 72% from Q1 but also 17% from the year earlier. Backed by the data up through Q3 2020, the Semiconductor Intelligence forecast for Q4 2020 projects that microcomputer production will go up 8% in 2020 as opposed to 2019.

While the definition of microcomputers in Chinese production data is uncertain, they are likely comprised of PC’s and tablets. Using this, China’s microcomputer production in 2019 was reported at 338 million units. Meanwhile, the IDC estimated that shipments of PC’s in 2019 were at 266 million units whereas tablets were 142 million units, accounting for a total of 410 million units. Combining these two sets of data points together, China’s microcomputer production is 83% of the combined PC and tablet shipments. This data representing Chinese production is also consistent with overall trends in electronics in 2020.

With millions across the globe forced to work or learn from home as a result of the COVID-19 pandemic, demand for PC’s and tablets has never been higher, connecting the world in ways unprecedented to times before, making the production levels of these products more important than ever.

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