COVID-19 is decimating the global economy and reshaping the ICT ecosystems. Digitimes president Colley Hwang's new book, Diconnected ICT Supply Chains: New Power Plays Unfolding, sheds light on post-pandemic situations the ICT supply chains face.
There are many factors that should be taken into consideration when doing market research. To better assess supply chain changes, let's first draw a 3x3 grid that offers a clear framework on all key information. Across the diagonal of the grid, we put the fundamental factors that will affect the ICT industry's integrity and influence. Then, we put supply-side factors on the upper left part of the grid and demand-side factors on the lower right. This will help us gain a grasp of key information when searching through a massive database.
To give a clear picture of the ICT industries, we can divide them into five major market segments - communication, computing, home appliances, automotive electronics, and industrial automation/defense. For example, computing and communication contribute about 65-70% of the ICT sales, with consumer electronics, automotive devices, and industrial control each accounting for about 10%. Automotive devices promise explosive growths, while industrial control involves large varieties of applications. But the arrival of 5G is also promising huge business opportunities for industrial applications. Consumer electronics still have potentials coming from smart home applications, such as TVs.
China has a population of 1.4 billion in 2020. China's GDP would reach US$15.7 trillion according to CIA estimates. If China could maintain its target of a 6% growth, its GDP would be close to 80% of America's US$20 trillion. CIA even projected that China's GDP would climb to US$38.2 trillion by 2040, far surpassing America's US$28.8 trillion. China has become the world's factory and the world's biggest market.
When Chinese president Xi Jinping declared war on COVID-19, I knew the outbreak in China must have been very grave. At the time, many Taiwanese CEOs and managers had returned home from China for the Lunar New Year break. They couuld not go back to work in China after the holiday, and yet these "stranded" CEOs provided us with very good sources of first-hand information about what was actually happening to the supply chains in China during the outbreak. As an analyst with 35 years of experience under my belt, and with strong ties with many industry leaders in Taiwan, I felt a strong commitment to recording what I was witnessing at this turning point.