INSIGHTS

Coronavirus Causing No Short-Term Impact on MBX Supply Chain

February 10, 2020 | Post

Very little disruption expected to component availability over the next 4-8 weeks.

Carl Nothnagel, MBX Chief Operating Officer

Every day we are working with our suppliers and partners around the world to filter the official and unofficial information we’re hearing about the coronavirus to stay on top of potential market constraints. We’d like to share what we know today and our opinions on the upcoming impact as it affects the overall electronics supply chain. 

Currently, some manufacturers in southeast Asia are shutting down administrative offices to help protect their employees. Also, some manufacturers have begun relocating production to facilities in other parts of the world, similar to the changes that happened with tariffs on Chinese technology products. 

Looking specifically at supply itself, over the next 4-8 weeks, we expect very little disruption in material supply as a direct result of the virus. (This doesn’t shield us from the SSD shortages that have been ongoing.) We’re fortunate to be able to meet short-term demand for two reasons: our strong inventory position and our suppliers building up inventory ahead of factories shutting down for Chinese New Year. 

That being said, like a storm building on the horizon, the question is not if it’s going to hit us, but how soon and how hard. We feel very strongly that when this existing surplus of supply dwindles and the possibility of the spread of the virus causes protracted manufacturer shutdowns, the ongoing impact will cause supply shortages as early as March and continue into Q2 2020.

To minimize the impact to our customers, we are recommending they talk to their MBX account team about extending sales forecasts into Q2 so we can attempt to procure advance inventory and keep orders flowing. 

Feel free to reach out with any additional questions or concerns.