COVID-19: Sony Electronics’ supply chain faces instability

The impact of COVID-19 continues to create instability within the supply chain industry, with its recent target being Sony Electronics.

In a recent statement made by the company, Sony’s electronics segment is experiencing supply chain issues. The issues come as a result of its manufacturing plants closing operations in China and Malaysia, as well as the company facing an unstable flow of resources from its suppliers in Asia.

In January, the technology company shut down four of its manufacturing plants located in China. Although since then the plants have reopened and began to restart operations, the company reports that the issues within the Chinese supply chain remains the same.

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Meanwhile in Malaysia Sony’s manufacturing plants remain closed due to local government mandates, and has also been ordered to close its manufacturing plant in Wales by the UK government until April 20.

"Sony's primary customers in this segment are smartphone makers who rely on supply chains in China, and although recovery in these supply chains has led to sales gradually returning to normal levels, there is a risk that going forward sales could be impacted by a slowdown in the smartphone market," commented Sony in a company statement.

Other impacts to the company include, movement restriction across national borders, providing Sony with the challenge of getting its engineers to manufacturing hubs to help with new product launches or giving manufacturing instructions.  

On a more positive note the company has not seen its imaging and sensing solutions face a material impact as of yet, however the company did note that there is a risk for sales to be impacted by the eventual slowdown of the smartphone market. "Depending on how the situation evolves, that impact could be large enough to eliminate the entire amount of the upward revision," added Sony.

"Sony expects that its consolidated financial results will continue to be impacted by the spread of infection from COVID-19 in the fiscal year ending March 31, 2021, which begins in April this year […] It is possible that the spread of COVID-19 could lead to delays in account closing procedures and other operations, making it difficult for Sony to proceed with this announcement as planned."

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Image source: Sony