Some firms are anticipating a drop in consumer demand and economic slump, but performance at electronics retailers and chipmakers is hinting at benefits from the shift in work culture.
Over the past month, governments and companies globally have been advising people to stay safe indoors. Over roughly the same period, South Korea - home of the world’s biggest memory chip maker, Samsung Electronics - on Monday reported a 20 percent jump in semiconductor exports.
Analyst Park Sung-soon at Cape Investment & Securities said: “With more people working and learning from home during the outbreak, there has been rising demand for internet services ... meaning data centers need bigger pipes to carry the traffic.”
A South Korean trade ministry official told Reuters that cloud computing has boosted sales of server chips, “while an increase in telecommuting in the United States and China has also been a main driver of huge server demand”.
Laptop maker Dynabook reported brisk demand which it partly attributed to companies encouraging teleworking. Rival NEC Corp said it has responded to demand with telework-friendly features such as more powerful embedded speakers.
China is leading chip demand, analysts said, as cloud service providers such as Alibaba Group Holding Ltd, Tencent Holdings Ltd and Baidu Inc quickly responded to the government’s effort to contain the virus.
Canalys analyst Yih Khai Wong said: “Cloud companies opened their platforms, allowing new and existing customers to use more resources for free to help maintain operations. This set the precedent for technology companies around the world that offer cloud-based services in their response to helping organisations affected by coronavirus.”
China’s cloud infrastructure pushed up chip prices, with spot prices of DRAM chips rising more than six percent since 20 Feburary, according to price tracker DRAMeXchange.
UBS last week forecast average contract prices of DRAM chips to rise as much as 10 percent in the second quarter from the first, led by a more than 20 percent jump in server chips.
It said it expects DRAM chips to be modestly under supplied until the third quarter of 2021, with demand from server customers rising 31 percent in 2020 and 2021.
Concerns over supply disruption has also contributed to a price rise.
More than 69 percent of electronics manufacturers have flagged possible supplier delays averaging three weeks, showed a poll on March 13 by industry trade group IPC International.
Half of those polled expected business to normalise by July, and three-quarters thought that October was more likely.
