"The problem of coronavirus (CoV) in Wuhan, China seems to be getting worse. At present, more than 20,000 have been infected worldwide, and the speed is increasing rapidly. Most of the people currently infected are in China, but they are also spreading globally. There are confirmed cases in more than 20 countries including Korea, the United States, Germany, Taiwan, Japan and more. At least 10 cities in China have been on lock-down and affect more than 50 million people. However, the number of cities and people affected in China is still increasing.
So far, there is no cure for CoV. However, the virus’ genetic code has been read. A vaccine can be synthesized in around three months, but it will take some time to ensure efficacy and distribute.
While the outbreak is in progress, people are deterred from venturing out to shopping centers and even online deliveries are disrupted.
In addition to demand side disturbances, the outbreak also impacts the supply side. At present, the cities on lock-down are located in Hubei Province which is a region of semiconductor and automotive manufacturing. In terms of semiconductors, there are several fabs in Wuhan, including SMIC, YMTC, and XMC. YMTC is a 3D NAND manufacturing plant. However, its capacity remains small, so will have less impact on the memory industry. The main product of XMC is NOR flash. XMC ranked No.5 in 2018 but is an important NOR flash supplier in China. The outbreak will affect the supply of NOR in the short term.
There are various studies assessing the impact of the epidemic on the Chinese economy and even globally. The EIU believes it will reduce China's GDP by at least 0.5%. The SARS that occurred in 2003 also had a negative impact on China's economic growth. But many believe that this time the negative impact will be greater than SARS." – Brady Wang
