IPC Update on Electronics Manufacturing and COVID-19 – April 28, 2020

As leaders and citizens around the globe continue to work together to fight the COVID-19 pandemic, the electronics manufacturing industry is facing a variety of challenges, including unclear and evolving operating restrictions; changing demand patterns; abnormalities in supply chains; and an unsettled workforce that was already stretched thin.

IPC is monitoring the health of the electronics manufacturing industry on several fronts, including a series of calls with member company executives. The following observations are current as of April 28, 2020.

Federal unemployment benefits might be creating conflicts of interest: Some executives report that the increased federal unemployment benefits being provided under the recent CARES Act might be incentivizing some furloughed workers to remain out on temporary leave. Companies note that furloughed workers still have access to valuable benefits in many instances, and some companies have reminded employees that these benefits are contingent on returning to work.

Electronics manufacturers and suppliers report plans to bring back furloughed workers. The majority of executives who replied to IPC’s latest online poll said they expect to bring furloughed workers back to factories by the end of June 2020. However, one in five said furloughed workers will not be brought back.    

Figure 1: Electronics manufacturers and suppliers plan to bring back furloughed workers in the coming months

Q: For employees that you had to furlough, when do expect to bring them back?

Many companies expect remote work to end in June: Nearly 70 percent of all executives responding to our survey reported they expect work-from-home arrangements to end in June 2020. Roughly 6 percent reported they will continue the option to work remotely indefinitely.  

Figure 2: Most Executives Expect Remote Working to End by June 2020

Q: For your employees who are currently working remotely, when do you expect they will return to the office on a permanent basis?

Electronics manufacturers and suppliers are preparing for the “next normal”: Industry executives are beginning to grapple with how to return to a new version of “normal” in the coming months. This task includes evaluating and deciding what health-protection measures will be necessary, and what new implications might exist for OSHA and EEOC requirements. IPC is also hearing concerns about the possibility that lawsuits might arise over company actions taken to date or over unforeseen new risks.

Electronics manufacturers and suppliers have received PPP funding. Nearly 70 percent of executives who responded to our survey reported applying for a Payroll Protection Program loan through their local banks. Roughly 44 percent of respondents reported having received funding, while 25 percent were still waiting to receive funding. About one in five said they have not and will not apply for a PPP loan, while nearly 10 percent reported they would apply for a PPP loan if additional funding becomes available.

Last week, the U.S. Congress approved another $310 billion in new funds for the PPP, and President Trump signed the bill on April 24. The program reopened for applications on April 27.

Figure 3: Many Electronics Manufacturers and Suppliers Have Applied for and Received PPP Funding

Q: Have you applied for or do you expect to apply for a PPP loan?

Companies mostly have not applied for EIDL loans: Only 7 percent of executives reported they have applied for an Economic Injury Disaster Loan (EIDL) from the U.S. Small Business Administration (SBA). Nearly half of respondents reported they do not plan to apply for an EIDL.

Figure 4: Electronics Manufacturers and Suppliers Have Not Applied for EIDL Loans

Q: Have you applied for an EIDL Loan?