The COVID-19 Pandemic's Impact on the Computer Hardware Industry: A Reality Check

As the world grapples with the ongoing COVID-19 pandemic, the computer hardware industry is facing unprecedented challenges. With the global economy experiencing a slowdown, manufacturers are struggling to meet demand for their products. In this article, we will explore the current situation and provide an informed perspective on the impact of the pandemic on the industry.

Our team recently visited EVGA's headquarters in Taiwan, where we were able to gather information about the company's experiences during this time. While it was clear that many decisions are still being made by the headquarters, there is one place where companies can get clean information: the Taiwanese government's official website. As a result, we relied on publicly available data and news reports to paint a comprehensive picture of the industry's situation.

One of the most significant challenges facing the industry is product delays. With many factories still operating at reduced capacity, production times have increased significantly. This has resulted in longer lead times for customers, which can be frustrating but ultimately manageable with some planning ahead. However, it's worth noting that these delays are not necessarily a result of any inherent problems with the products themselves, but rather a consequence of the current economic situation.

Another issue we encountered during our visit was the requirement to wear masks and undergo thermographic checks upon entering factories or VIP buildings. While this may seem like an inconvenience, it is a necessary measure to ensure public health and safety. We were surprised to learn that many of these checks are being performed by untrained personnel, which raises questions about their accuracy.

As for economic impact, we spoke with several industry experts who warned that the pandemic could lead to a loss of one to two quarters of progress in the industry. This would result in significant financial losses and potentially even job losses. However, it's worth noting that many manufacturers are taking steps to mitigate these effects, such as implementing backup staff and increasing production schedules.

Interestingly, some experts have noted that the pandemic has also had an indirect impact on the YouTube algorithm. With more content being pushed out due to the increased demand for information during the pandemic, viewers may find themselves stuck in a "virus-themed" vacuum, with less access to other types of content. Our team is working to address this issue through our own content strategy, which will include more non-pandemic-related videos.

In terms of advice for customers, we would recommend exercising caution and not buying computer hardware simply because it's available. If you don't need something urgently, there's always a chance that the product will become available later in the year. However, if you do need something now, be prepared to wait – and consider planning ahead.

On a more positive note, we're encouraged by reports that many factories have begun to recover from the pandemic-induced slowdown. With workforce backup rates increasing and factory uptime improving, it's clear that the industry is working towards getting back on track. As with any disruption, there will be some weeks of adjustment before things return to normal. But for now, at least, we're seeing signs of progress.

In conclusion, while the COVID-19 pandemic has undoubtedly had a significant impact on the computer hardware industry, it's essential to maintain a rational perspective and focus on what matters most – delivering high-quality products to customers. As the situation continues to evolve, our team will remain committed to providing accurate information and insights into this rapidly changing landscape.

"WEBVTTKind: captionsLanguage: enexcept you can't wipe your ass with it well I mean we're going to take a gamble on the YouTube D monetization system and talk about the impact of coronavirus on the computer hardware industry yes yes we set it but we'll only say it once from now on at last YouTube angers that repeated offenses of saying the word will refer to the global pandemic mostly as human malware though it sounds like it might not be demonetized as much anymore when we last for Taiwan the situation was only just developing in the US and Taiwan had things very controlled and still does but things changed drastically in the West during the two weeks we were in Taiwan we spent some time gathering information on the ground as the situation developed and learned that human malware has cost the industry millions and motherboards and video card production alone and that's just the board partners in this video will report on the numbers we've gathered relating to delays and hardware industry impact resulting from human malware before that this video is brought to you by Squarespace Squarespace is what we've been using for years to manage our own gamers Nexus store and we've been incredibly happy with the choice Squarespace makes ecommerce easy for those interested in starting stores but it also has powerful tools to build all types of websites photo galleries for photographers resume and portfolio sites and small business sites are all easily done through Squarespace having built a lot of client websites the old way before running GM full-time we can easily recommend Squarespace as a powerful fast solution go to squarespace.com slash gamers Nexus to get 10% off your first purchase with Squarespace as the situation became much more severe in the last week or so we noticed a significant fall-off in viewership against our normally very accurate estimates for viewers our factory tour series was on track to do 100,000 views per video at a minimum but we've been competing against global non-stop coverage of the pandemic we'll be talking in this video about how it relates to the computer hardware industry in an objective fact-based approach and we would like to encourage a rational approach to the conversation rather than a panic driven one just like we talked about a few weeks ago when we discouraged panic purchasing of a commodity computer hardware so we're going to talk about the impact of human malware on the computer hardware industry we have some value to adhere from the PC side and we have some unique information that we've collected on the ground in Taiwan where most of the companies that you purchase things from are headquartered also a lot of the factories or in the very least supply chain level factories so we've got some unique stuff to talk about there the factory tour series will continue after views for normal content pick back up and stop competing again with global news agencies stealing every breath of air time our topics are broken into three categories for this one so the thesis if you will is as follows where you know we talked about the follow-up on our piece from two weeks ago where we discouraged panic buying of computer hardware a couple of people have asked us how do you feel about it now so we'll go through that we'll talk about point number two a discussion on production delays to new products and potentially to Computex which would therefore impact new products and three factory closures and the number of units lost to low production or factory capacity so that's going to be units of products not we're not talking dollar amounts I don't have the exact cost of the product and that's a much more complicated equation anyway but we're talking about how many motherboards video cards whatever haven't made it to the channel which would be retailers or distributors of sorts that otherwise would have been here if this whole thing didn't happen so that's our three points and the third one there should be very interesting so we've got a lot of on the ground literally in the factory information when we visited Taiwan on to the new topics production delays and timelines first up here all this human malware impact has caused delays to production timelines of computer hardware clearly we've long discussed that Lunar New Year alone in combination of course with a global pandemic and more importantly combined with the resulting panic by some people sometimes deserved more so than others this would all have an impact to scheduling we didn't have many concrete examples a couple weeks ago but after going to Taiwan and visiting a lot of the headquarters of these companies we do now before talking more about the why of production delays mostly relating to manpower and raw material availability we'll give some examples MSI's new x5 Saudi tomahawk was pushed back 1 to 2 months minimally it was supposed to launch in March but amis I was unable to get supply from its lower down supply chain factories in order to make the board's an example might be the suppliers of capacitors who although they might be operating at full capacity can't get supply from their suppliers like the metal suppliers or the heatsink suppliers who can't get supply from the metal suppliers MSI's primary factory in shenzhen responsible for millions of video cards and motherboards per month was shut down for two full months as a result of Lunar New Year and human malware combined the Shenzhen Factory has ten SMT lines that are 121 metres long each the ten service mount technology lines are responsible for producing 1.6 million motherboards per month and 1 million video cards per month as of 2019 the factory requires a staff of about 5000 people but often operates at reduced staff because it has trouble already finding staff in Shenzhen typically closer to 2,500 and this depends on order volume so that's a lot of people who are unable to man the factory given an extra four weeks of unexpected total halt of production that's 2.6 million products from one factory and from one company that never made it to the channel and the factory is currently operating at a reduced workforce due to slow returns following quarantines and usual Lunar New Year worker departures this factory like most in Shenzhen was already struggling to find enough workers under normal conditions as a result of lack of interest in factory jobs these days and the service job boom in China now that it's competing with a pandemic it's having even more difficulty with manpower in terms of real impact that's again about 2.6 million products based on numbers from last year fewer that could have been made in one month of extra downtime at one factory not counting the reduction capacity from a smaller workforce one of the many affected products was the x5 7e tomahawk which has now been pushed back to April or May although may looks more likely that gives you the first concrete example most of these companies although they often don't own the factories or at least not all of the ones that they work with they have partner factories that they work with companies like power logic which is responsible for making a lot of the fans that are used in video card heat sink fan combinations that you see in the industry they're a lower down supply chain manufacturer that could also be impacted which would have again a knock-on effect to the company that's buying those fats which would be a messiah EVGA Giga Byte whomever so only to AIB Partners have any meaningful capability of producing parts in Taiwan which is less affected and that's gigabyte an EVGA the gigabyte solution they have their own factory that we've toured before we have the video up on the channel if you want to see it it's located in Dalian County and they've told us in the past that this Factory is typically reserved for high-end products right now it's used to make anything they can the company makes its higher order volume parts in China typically and it's been impacted there similarly to a mossad EVGA meanwhile doesn't own a factory and instead relies on suppliers who are now located at least partially if not primarily and I want some of these companies like EVGA and gigabyte started to shift their manufacturing to Taiwan once the tariffs were becoming a concern last year the companies that were angling themselves to thwart the tariffs by relocating factories to Taiwan sometimes Thailand sometimes Vietnam those companies are going to be less affected well at least the ones in Taiwan anyway less affected by this pandemic because they were trying to combat something else so Eva J in that instance would be a bit better position than some of its competitors for gigabyte the company's Taiwan factory makes 200,000 video cards and 200,000 motherboards per month on average as of 2019 the factory also makes 50,000 units of PCBs that it sells to other parties or uses in its other product categories that's 450,000 units per month produced of products and have some tea lines which is a lot for a more real estate constrained Factory in Taiwan especially considering the higher labor cost that factory had a period of halted or reduced work as a result of the human malware outbreak and trying to contain it this contributed to a reduction in products to the channel of at least a couple hundred thousand units compounding when considering Lunar New Year also around the same time gigabyte has also disallowed any visitors to its factory although we were able to get access to the company's headquarters in Taipei for overclocking and interview content the ban on visitors to the factory extends beyond third party companies like ours and to internal employees who've traveled recently like those who might be flying in from the US to visit the Taiwan factories this will slow down production significantly this information was before Taiwan closed its borders mind you so now some of that is moot since there's a greater override in place at a government level but we're talking about the last month or two rather than now and separately this is broken out from that meme going around of how many we can now find out how many medians could have been emails instead because we're talking about product managers product developers designers people who need to see physically the product or potentially the production line in order to call shots on how it's made so you could have a quality hit there if they can't make it out there or you could have a delay to the product coming to market if someone absolutely needs to see it in person at least someone who is from the US office instead as for HQ gigabyte has restrictions in place that require masks constant washing of hands and forbids anything like a handshake none of that's particularly relevant to production but the restriction to outside visitors is we were only able to visit because we'd been in the country for two weeks already which has passed the recommended quarantine period and because we were relegated just to the conference room off of the main entrance to the building we weren't allowed to go into any of the labs this time from product managers or other internal workers this could end up canceling trips entirely since they'd just be sitting in a hotel room for two weeks and that'll slow down production since those people are needed for oversight and final approval of products and it's also kind of a waste of their time if they could instead be in the u.s. doing a lot of their work there instead of a hotel room which cost money over time we can't say which of the two CPU companies is affected for this particular item but this example is a CPU press event the motherboard company is on the ground informed us off record that one of the companies was planning an event for March relating to a training day for system integrators and a demonstration day for media members some of the professional overclockers who work at motherboard companies were traveled to scheduled to travel to California for this event but had to cancel as a result of human malware concerns the cpu event seems to have been silently cancelled as well it technically wasn't officially announced yet so that's okay and this could have implications for review and timings for launches of new CPUs because motherboard manufacturers are running behind on production anyway this ends up working out for them in this particular instance and it's probably all together to begin with we reckon with coolermaster and Lian Li over the past few weeks for factory tours we learned that both companies have important product launches planned for right around copy tax which would be the last week of May and the first week of June we actually recommended that the companies consider LT acts as an alternative launch venue since Computex will likely be cancelled and that's another topic entirely but that will depend on if things are under control before August in the very least some of these products pending the likely postponement of Computex by tight rrah will be delayed to third quarter some of the case manufacturers are also now working from home - as our Intel Dell and AMD except for crucial meetings or people who need to be on site like warehouse workers this will cause efficiency and product quality issues in production as well after what seems like already countless delays we've got three other concrete examples for you AMD's B 550 is now anticipated for launch after what would be Computex if it happened at present the B 550 chipset which is explicitly different from B 550 a mind you is due for an end of June or early July but that's still uncertain Z for an idea was rumored online for launch before combi tax but we've been told that the impacts to the factories at a motherboard level and the very least could cause delays beyond the initial launch period for board availability in the least and it'd be likely that Intel would probably align its launch when with with--when motherboards would be available otherwise kind of be shooting itself in the foot we've also heard from partners in the industry that entails much-anticipated ghost cannon nook will be delayed at least a few weeks if not longer this is also due to the production capacity limitations resulting from Corona well shorten it I guess Kurt's cos øx got away with it so maybe we will hand and you have to remember there's a lot of partners tied into that ecosystem the ghost Canyon nook ecosystem because Intel although they sort of speck it out they design it they do the silicon they are not making at least entirely on their own the board the risers the case the power supply all that stuff comes from other people which is normal there's nothing wrong with that that's normal for a product but the point is that each of these manufacturers suppliers has delays on its own pipeline and that's going to cause the final product to be delayed because they can the parts for it here's another one this one's pretty big for a concrete example for you production delays copy tax is likely another victim of human malware side-channel execution attacks the event is the industry's largest and most influential each year it can dictate whether products succeed or fail when they launch and it sort of lines up the rest of the or at least the following quarter it's around the same time every year end of May early June and at this point probably gonna be canceled or postponed rather but they haven't officially said anything so although some people like to brag about how they don't watch show coverage the reality of it is that most people do that's fine if you don't like it but most people do watch it and it does drive the industry for the rest of the year so as an example just looking at us alone not even talking out the people who make the products but just the people who talk about the people who make the products we can typically triple or quadruple our viewership in a week from coffee tax or from CES same thing roughly and that's important for us because it gives us a revenue boom that we need to sort of fund bigger projects throughout the year and that's true for most the other media people too and they often last by the way for more than a week because the way the YouTube algorithms built you have high viewership for a while it's like wow you're doing the million views for per 48 hours rather than your usual whatever it is so your channels to dhamaal so it it boosts you for some period of time that's not quite known but it seems to have knock-on effects right least a month so that's going to be a big deal if it's cancelled for the media and it'll be a big deal for the hardware companies too even if you don't watch Computex coverage without a major venue to announce products it's likely that the products will instead be pushed back to later launches in the year later events in the year which will create an economic slowdown and ripple effects to the financials for every company involved in the computer hardware industry especially including youtubers and when we reached out for comment Taiwan's Tourism Council which runs Computex by the way tight rene i tra simply told us that it would update us on the status later and had no comment at this time we spoke with our hosts during the tours and learned that tight rrah is currently asking manufacturers for opinions on if the show should be postponed or canceled or held and because so many travelers for coffee tax come from China especially the companies that are headquartered in Taiwan they have factories in China as almost everyone does it looks like due to the travel restrictions most companies are recommending postponement of the show currently further from a PR standpoint it would look at this point anyway irresponsible to rally hundreds of thousands of people together including high-profile reviewers with influence to potentially cause an outbreak because this there's no wedding that PR battle and we suspect the event will be postponed it also becomes difficult to market your event to exhibitors in the future because you're saying something like I'm pulling these numbers out of the air but you know hundred thousand year or visitors 150,000 200,000 you always want to show growth and then whoa suddenly it's down to a hundred thousand because everyone didn't want to they were scared they didn't want to go or they couldn't go or their travel restrictions and that just looks bad because what are you supposed to do next year say oh I just ignore that data it's bad that was because of the thing going on so the current rumor is that it will be pushed into August or September we heard September more than August although tighter would not confirm when asked it's effectively an entire quarter of slowdown though for the industry last point we've had a lot of people in the comments asked us if we still hold our position on not panic buying hardware right now our position originally was that no you absolutely should not be buying computer hardware right now just because you want to make sure you get it before someone else does that would put you in the same category of people who are panic buying toilet paper except you can't wipe your ass with it well I mean no I don't think well maybe a GT 1030 but generally you can't actually I wonder if you could repurpose water coolant pumps as a bidet and I've spent too much time in Taiwan anyway that puts you in the same group of people except it's a commodity it's not even something that you need to use is the point generally speaking computer hardware despite potentially looking at a shortage actually almost certainly looking at a shortage in the near term for sure it's just it's not some than you need to survive and ultimately our concern in that video was that panic drummed up by internet comments online would cause people to spend money on a gaming PC when they should be worried about something that's probably more important if you were a couple weeks ago of the opinion that the economy was going to crash and therefore you have to purchase a gaming PC now before all the parts disappear our counter to that was well ok but like what if you lose your job because that's really the the real consideration it was that anyone who was concerned about the impact of the world of gaming computers should have looked a bit past that and thought what's the impact to my life externally from gaming computers and will that have a knock-on effect so we still stick by that and I personally feel pretty good about advising against panic buying just because you want to make sure you get something before all the parts disappear because now people have been in the two weeks since we posted that video anyway countries globally have experienced temporary business closures service industries were hit especially hard even in the US where we often benefit from being a bit more spaced out geographically we're still seeing restaurants closed and service centres close as non-essential businesses stripped down their hours and even essential ones do so of course you'll be fine if you work at Gamestop according to the latest news out of them but anyone else might have a bit more to be concerned about the computer hardware all this said will reiterate what we said in our first video on the subject which is that a lot of people are going to need their money that be spent panic buying PC parts a few months early for other things like food and rent especially in those sectors where they're the hardest hit by shutdowns so a lot of people lost hours and wages overnight we'd say that yes we made the right call if you are in an industry that's not impacted maybe you're self-employed and you're not impacted which would mean that you're not a youtuber or you are per hat maybe you are but in a different category or maybe you are just wealthy there's nothing wrong with any of those things it just means that you should still follow the basic advice anyway of only buying when you actually need system not just because you want to make sure you get it before someone else does okay so back to reality then now that we've gone through the facts the data we've gathered on the ground in Taiwan which is about as close as you can get to the source of this stuff it's time to bring everyone back to reality if it's not all doom and gloom so a first reminder in Taiwan most the companies are headquartered there including companies that you often perceive as being headquartered in the u.s. EVGA is one of them and the people who work in the Taiwan age queues are going to be the closest to actual information especially for things like copy tax because I mean that's that's tighter that's basically the Taiwanese government putting on that show or at least the Tourism Council so the information can't get much cleaner than the people who work in Taiwan at the headquarters where the companies are actually making their decisions gigabyte has a u.s. headquarters and it has important people there but all of the decisions come down through HQ real HQ in Taiwan and that's gonna be true for mostly companies EVGA as well so that's a good place to get clean information most of these issues though they're related to product delays or slightly inconvenient processes like the requirement to wear masks as a visitor to the country when you're visiting factories or the requirement be thermographic ly checked at the entrance to buildings basically every VIP building we went into it was either a thermal camera or just a laser thermometer they pointed at your head when you walk in kind of debate the accuracy of that but that's another story especially given that there's no training for the people often using that but whatever anyway it's like I challenge your testing methodology for my thermals the you know who I am I invented out-of-the-box thermals but actually that was a viewer but yeah so a lot of the stuffs inconvenient or kind of annoying but there are product delays there's going to be an economic hit to the industry I'm not an economist I don't know how bad it'll be I don't foresee it being doom and gloom everything's over it's all like it's the end I'm not really in that camp so when I see currently switching over to I guess informed opinion from some of the so that we shared I see the industry being on track to lose one to two quarters of progress and that's why I'm reaching economic impact to the industry we're gonna see a slowdown I'm sure the other youtubers could see a slowdown or at least less viewership than they might have otherwise and we've already seen it in an indirect way because we've noticed viewers are not able to get to the content that isn't related to the virus which is in part a YouTube thing it's in part timing I guess but you're looking at a challenge where there's probably more content right now being pushed to YouTube then typically would be the case and a lot of its around one topic and the way the algorithm works is it sucks you into a topic and then it it doesn't spit you back out again until you stop watching that content so people are probably stuck in this vacuum of virus content and this is our way of getting them back is basically what I'm saying but hopefully it provides some actual value for you and I apologize if you didn't want to hear more virus discussion from our channel because I didn't really and I get it I don't really want to do it I'd rather do computer stuff but at least this has computer news in it so anyway it looks like we're on track to lose a couple quarters of progress here as an industry computer launches hardware launches stuff like that most the news organizations right now are talking nonstop about human malware because if it bleeds it leads and they are more doom and gloom oriented so just to remind it from us it's not the end of the world there will be a delay we would advise still that you don't just buy a computer hardware because you want to make sure you get it before it's out of stock because there's gonna be more especially because there's new silicon launching this year anyway whether or not it's delayed so unless you need something now you shouldn't really be buying but that's pretty much always true alright so we've tried to stick to the facts and the numbers for this to avoid encouraging any sort of panic and like before advisors taking a rational approach focus on things outside of buying a computer it's just not that important you can always get it later in the year the biggest problem here ultimately is supply chains and the lower down supply chain availability and factory uptime and that is improving right now we know that a lot of the factories have gotten their workforce backup from as low as 10% and from furloughing if that's an appropriate use from putting their employees on furlough for two days a week they've kind of covered from that now it's a matter of getting supply and that's gonna take some weeks as well but things are recovering at least in the production side of the industry now it's gonna be a matter of getting the schedule back on track and that's gonna be it for this one thanks for watching check out the main channel go watch our factory tour series because a lot of people were excited about it and then I think it wasn't really getting cycled as a quick side note we're going to have a video on our secondary channel G on Steve where I'm just riding around on an e-bike talking about the situation currently as it impacts YouTube in our content production so we'll link that below if you want to check that one out and I go to store my cameras axis net or patreon.com slash cameras Nexus tops I directly thanks for watching we'll see you all next timeexcept you can't wipe your ass with it well I mean we're going to take a gamble on the YouTube D monetization system and talk about the impact of coronavirus on the computer hardware industry yes yes we set it but we'll only say it once from now on at last YouTube angers that repeated offenses of saying the word will refer to the global pandemic mostly as human malware though it sounds like it might not be demonetized as much anymore when we last for Taiwan the situation was only just developing in the US and Taiwan had things very controlled and still does but things changed drastically in the West during the two weeks we were in Taiwan we spent some time gathering information on the ground as the situation developed and learned that human malware has cost the industry millions and motherboards and video card production alone and that's just the board partners in this video will report on the numbers we've gathered relating to delays and hardware industry impact resulting from human malware before that this video is brought to you by Squarespace Squarespace is what we've been using for years to manage our own gamers Nexus store and we've been incredibly happy with the choice Squarespace makes ecommerce easy for those interested in starting stores but it also has powerful tools to build all types of websites photo galleries for photographers resume and portfolio sites and small business sites are all easily done through Squarespace having built a lot of client websites the old way before running GM full-time we can easily recommend Squarespace as a powerful fast solution go to squarespace.com slash gamers Nexus to get 10% off your first purchase with Squarespace as the situation became much more severe in the last week or so we noticed a significant fall-off in viewership against our normally very accurate estimates for viewers our factory tour series was on track to do 100,000 views per video at a minimum but we've been competing against global non-stop coverage of the pandemic we'll be talking in this video about how it relates to the computer hardware industry in an objective fact-based approach and we would like to encourage a rational approach to the conversation rather than a panic driven one just like we talked about a few weeks ago when we discouraged panic purchasing of a commodity computer hardware so we're going to talk about the impact of human malware on the computer hardware industry we have some value to adhere from the PC side and we have some unique information that we've collected on the ground in Taiwan where most of the companies that you purchase things from are headquartered also a lot of the factories or in the very least supply chain level factories so we've got some unique stuff to talk about there the factory tour series will continue after views for normal content pick back up and stop competing again with global news agencies stealing every breath of air time our topics are broken into three categories for this one so the thesis if you will is as follows where you know we talked about the follow-up on our piece from two weeks ago where we discouraged panic buying of computer hardware a couple of people have asked us how do you feel about it now so we'll go through that we'll talk about point number two a discussion on production delays to new products and potentially to Computex which would therefore impact new products and three factory closures and the number of units lost to low production or factory capacity so that's going to be units of products not we're not talking dollar amounts I don't have the exact cost of the product and that's a much more complicated equation anyway but we're talking about how many motherboards video cards whatever haven't made it to the channel which would be retailers or distributors of sorts that otherwise would have been here if this whole thing didn't happen so that's our three points and the third one there should be very interesting so we've got a lot of on the ground literally in the factory information when we visited Taiwan on to the new topics production delays and timelines first up here all this human malware impact has caused delays to production timelines of computer hardware clearly we've long discussed that Lunar New Year alone in combination of course with a global pandemic and more importantly combined with the resulting panic by some people sometimes deserved more so than others this would all have an impact to scheduling we didn't have many concrete examples a couple weeks ago but after going to Taiwan and visiting a lot of the headquarters of these companies we do now before talking more about the why of production delays mostly relating to manpower and raw material availability we'll give some examples MSI's new x5 Saudi tomahawk was pushed back 1 to 2 months minimally it was supposed to launch in March but amis I was unable to get supply from its lower down supply chain factories in order to make the board's an example might be the suppliers of capacitors who although they might be operating at full capacity can't get supply from their suppliers like the metal suppliers or the heatsink suppliers who can't get supply from the metal suppliers MSI's primary factory in shenzhen responsible for millions of video cards and motherboards per month was shut down for two full months as a result of Lunar New Year and human malware combined the Shenzhen Factory has ten SMT lines that are 121 metres long each the ten service mount technology lines are responsible for producing 1.6 million motherboards per month and 1 million video cards per month as of 2019 the factory requires a staff of about 5000 people but often operates at reduced staff because it has trouble already finding staff in Shenzhen typically closer to 2,500 and this depends on order volume so that's a lot of people who are unable to man the factory given an extra four weeks of unexpected total halt of production that's 2.6 million products from one factory and from one company that never made it to the channel and the factory is currently operating at a reduced workforce due to slow returns following quarantines and usual Lunar New Year worker departures this factory like most in Shenzhen was already struggling to find enough workers under normal conditions as a result of lack of interest in factory jobs these days and the service job boom in China now that it's competing with a pandemic it's having even more difficulty with manpower in terms of real impact that's again about 2.6 million products based on numbers from last year fewer that could have been made in one month of extra downtime at one factory not counting the reduction capacity from a smaller workforce one of the many affected products was the x5 7e tomahawk which has now been pushed back to April or May although may looks more likely that gives you the first concrete example most of these companies although they often don't own the factories or at least not all of the ones that they work with they have partner factories that they work with companies like power logic which is responsible for making a lot of the fans that are used in video card heat sink fan combinations that you see in the industry they're a lower down supply chain manufacturer that could also be impacted which would have again a knock-on effect to the company that's buying those fats which would be a messiah EVGA Giga Byte whomever so only to AIB Partners have any meaningful capability of producing parts in Taiwan which is less affected and that's gigabyte an EVGA the gigabyte solution they have their own factory that we've toured before we have the video up on the channel if you want to see it it's located in Dalian County and they've told us in the past that this Factory is typically reserved for high-end products right now it's used to make anything they can the company makes its higher order volume parts in China typically and it's been impacted there similarly to a mossad EVGA meanwhile doesn't own a factory and instead relies on suppliers who are now located at least partially if not primarily and I want some of these companies like EVGA and gigabyte started to shift their manufacturing to Taiwan once the tariffs were becoming a concern last year the companies that were angling themselves to thwart the tariffs by relocating factories to Taiwan sometimes Thailand sometimes Vietnam those companies are going to be less affected well at least the ones in Taiwan anyway less affected by this pandemic because they were trying to combat something else so Eva J in that instance would be a bit better position than some of its competitors for gigabyte the company's Taiwan factory makes 200,000 video cards and 200,000 motherboards per month on average as of 2019 the factory also makes 50,000 units of PCBs that it sells to other parties or uses in its other product categories that's 450,000 units per month produced of products and have some tea lines which is a lot for a more real estate constrained Factory in Taiwan especially considering the higher labor cost that factory had a period of halted or reduced work as a result of the human malware outbreak and trying to contain it this contributed to a reduction in products to the channel of at least a couple hundred thousand units compounding when considering Lunar New Year also around the same time gigabyte has also disallowed any visitors to its factory although we were able to get access to the company's headquarters in Taipei for overclocking and interview content the ban on visitors to the factory extends beyond third party companies like ours and to internal employees who've traveled recently like those who might be flying in from the US to visit the Taiwan factories this will slow down production significantly this information was before Taiwan closed its borders mind you so now some of that is moot since there's a greater override in place at a government level but we're talking about the last month or two rather than now and separately this is broken out from that meme going around of how many we can now find out how many medians could have been emails instead because we're talking about product managers product developers designers people who need to see physically the product or potentially the production line in order to call shots on how it's made so you could have a quality hit there if they can't make it out there or you could have a delay to the product coming to market if someone absolutely needs to see it in person at least someone who is from the US office instead as for HQ gigabyte has restrictions in place that require masks constant washing of hands and forbids anything like a handshake none of that's particularly relevant to production but the restriction to outside visitors is we were only able to visit because we'd been in the country for two weeks already which has passed the recommended quarantine period and because we were relegated just to the conference room off of the main entrance to the building we weren't allowed to go into any of the labs this time from product managers or other internal workers this could end up canceling trips entirely since they'd just be sitting in a hotel room for two weeks and that'll slow down production since those people are needed for oversight and final approval of products and it's also kind of a waste of their time if they could instead be in the u.s. doing a lot of their work there instead of a hotel room which cost money over time we can't say which of the two CPU companies is affected for this particular item but this example is a CPU press event the motherboard company is on the ground informed us off record that one of the companies was planning an event for March relating to a training day for system integrators and a demonstration day for media members some of the professional overclockers who work at motherboard companies were traveled to scheduled to travel to California for this event but had to cancel as a result of human malware concerns the cpu event seems to have been silently cancelled as well it technically wasn't officially announced yet so that's okay and this could have implications for review and timings for launches of new CPUs because motherboard manufacturers are running behind on production anyway this ends up working out for them in this particular instance and it's probably all together to begin with we reckon with coolermaster and Lian Li over the past few weeks for factory tours we learned that both companies have important product launches planned for right around copy tax which would be the last week of May and the first week of June we actually recommended that the companies consider LT acts as an alternative launch venue since Computex will likely be cancelled and that's another topic entirely but that will depend on if things are under control before August in the very least some of these products pending the likely postponement of Computex by tight rrah will be delayed to third quarter some of the case manufacturers are also now working from home - as our Intel Dell and AMD except for crucial meetings or people who need to be on site like warehouse workers this will cause efficiency and product quality issues in production as well after what seems like already countless delays we've got three other concrete examples for you AMD's B 550 is now anticipated for launch after what would be Computex if it happened at present the B 550 chipset which is explicitly different from B 550 a mind you is due for an end of June or early July but that's still uncertain Z for an idea was rumored online for launch before combi tax but we've been told that the impacts to the factories at a motherboard level and the very least could cause delays beyond the initial launch period for board availability in the least and it'd be likely that Intel would probably align its launch when with with--when motherboards would be available otherwise kind of be shooting itself in the foot we've also heard from partners in the industry that entails much-anticipated ghost cannon nook will be delayed at least a few weeks if not longer this is also due to the production capacity limitations resulting from Corona well shorten it I guess Kurt's cos øx got away with it so maybe we will hand and you have to remember there's a lot of partners tied into that ecosystem the ghost Canyon nook ecosystem because Intel although they sort of speck it out they design it they do the silicon they are not making at least entirely on their own the board the risers the case the power supply all that stuff comes from other people which is normal there's nothing wrong with that that's normal for a product but the point is that each of these manufacturers suppliers has delays on its own pipeline and that's going to cause the final product to be delayed because they can the parts for it here's another one this one's pretty big for a concrete example for you production delays copy tax is likely another victim of human malware side-channel execution attacks the event is the industry's largest and most influential each year it can dictate whether products succeed or fail when they launch and it sort of lines up the rest of the or at least the following quarter it's around the same time every year end of May early June and at this point probably gonna be canceled or postponed rather but they haven't officially said anything so although some people like to brag about how they don't watch show coverage the reality of it is that most people do that's fine if you don't like it but most people do watch it and it does drive the industry for the rest of the year so as an example just looking at us alone not even talking out the people who make the products but just the people who talk about the people who make the products we can typically triple or quadruple our viewership in a week from coffee tax or from CES same thing roughly and that's important for us because it gives us a revenue boom that we need to sort of fund bigger projects throughout the year and that's true for most the other media people too and they often last by the way for more than a week because the way the YouTube algorithms built you have high viewership for a while it's like wow you're doing the million views for per 48 hours rather than your usual whatever it is so your channels to dhamaal so it it boosts you for some period of time that's not quite known but it seems to have knock-on effects right least a month so that's going to be a big deal if it's cancelled for the media and it'll be a big deal for the hardware companies too even if you don't watch Computex coverage without a major venue to announce products it's likely that the products will instead be pushed back to later launches in the year later events in the year which will create an economic slowdown and ripple effects to the financials for every company involved in the computer hardware industry especially including youtubers and when we reached out for comment Taiwan's Tourism Council which runs Computex by the way tight rene i tra simply told us that it would update us on the status later and had no comment at this time we spoke with our hosts during the tours and learned that tight rrah is currently asking manufacturers for opinions on if the show should be postponed or canceled or held and because so many travelers for coffee tax come from China especially the companies that are headquartered in Taiwan they have factories in China as almost everyone does it looks like due to the travel restrictions most companies are recommending postponement of the show currently further from a PR standpoint it would look at this point anyway irresponsible to rally hundreds of thousands of people together including high-profile reviewers with influence to potentially cause an outbreak because this there's no wedding that PR battle and we suspect the event will be postponed it also becomes difficult to market your event to exhibitors in the future because you're saying something like I'm pulling these numbers out of the air but you know hundred thousand year or visitors 150,000 200,000 you always want to show growth and then whoa suddenly it's down to a hundred thousand because everyone didn't want to they were scared they didn't want to go or they couldn't go or their travel restrictions and that just looks bad because what are you supposed to do next year say oh I just ignore that data it's bad that was because of the thing going on so the current rumor is that it will be pushed into August or September we heard September more than August although tighter would not confirm when asked it's effectively an entire quarter of slowdown though for the industry last point we've had a lot of people in the comments asked us if we still hold our position on not panic buying hardware right now our position originally was that no you absolutely should not be buying computer hardware right now just because you want to make sure you get it before someone else does that would put you in the same category of people who are panic buying toilet paper except you can't wipe your ass with it well I mean no I don't think well maybe a GT 1030 but generally you can't actually I wonder if you could repurpose water coolant pumps as a bidet and I've spent too much time in Taiwan anyway that puts you in the same group of people except it's a commodity it's not even something that you need to use is the point generally speaking computer hardware despite potentially looking at a shortage actually almost certainly looking at a shortage in the near term for sure it's just it's not some than you need to survive and ultimately our concern in that video was that panic drummed up by internet comments online would cause people to spend money on a gaming PC when they should be worried about something that's probably more important if you were a couple weeks ago of the opinion that the economy was going to crash and therefore you have to purchase a gaming PC now before all the parts disappear our counter to that was well ok but like what if you lose your job because that's really the the real consideration it was that anyone who was concerned about the impact of the world of gaming computers should have looked a bit past that and thought what's the impact to my life externally from gaming computers and will that have a knock-on effect so we still stick by that and I personally feel pretty good about advising against panic buying just because you want to make sure you get something before all the parts disappear because now people have been in the two weeks since we posted that video anyway countries globally have experienced temporary business closures service industries were hit especially hard even in the US where we often benefit from being a bit more spaced out geographically we're still seeing restaurants closed and service centres close as non-essential businesses stripped down their hours and even essential ones do so of course you'll be fine if you work at Gamestop according to the latest news out of them but anyone else might have a bit more to be concerned about the computer hardware all this said will reiterate what we said in our first video on the subject which is that a lot of people are going to need their money that be spent panic buying PC parts a few months early for other things like food and rent especially in those sectors where they're the hardest hit by shutdowns so a lot of people lost hours and wages overnight we'd say that yes we made the right call if you are in an industry that's not impacted maybe you're self-employed and you're not impacted which would mean that you're not a youtuber or you are per hat maybe you are but in a different category or maybe you are just wealthy there's nothing wrong with any of those things it just means that you should still follow the basic advice anyway of only buying when you actually need system not just because you want to make sure you get it before someone else does okay so back to reality then now that we've gone through the facts the data we've gathered on the ground in Taiwan which is about as close as you can get to the source of this stuff it's time to bring everyone back to reality if it's not all doom and gloom so a first reminder in Taiwan most the companies are headquartered there including companies that you often perceive as being headquartered in the u.s. EVGA is one of them and the people who work in the Taiwan age queues are going to be the closest to actual information especially for things like copy tax because I mean that's that's tighter that's basically the Taiwanese government putting on that show or at least the Tourism Council so the information can't get much cleaner than the people who work in Taiwan at the headquarters where the companies are actually making their decisions gigabyte has a u.s. headquarters and it has important people there but all of the decisions come down through HQ real HQ in Taiwan and that's gonna be true for mostly companies EVGA as well so that's a good place to get clean information most of these issues though they're related to product delays or slightly inconvenient processes like the requirement to wear masks as a visitor to the country when you're visiting factories or the requirement be thermographic ly checked at the entrance to buildings basically every VIP building we went into it was either a thermal camera or just a laser thermometer they pointed at your head when you walk in kind of debate the accuracy of that but that's another story especially given that there's no training for the people often using that but whatever anyway it's like I challenge your testing methodology for my thermals the you know who I am I invented out-of-the-box thermals but actually that was a viewer but yeah so a lot of the stuffs inconvenient or kind of annoying but there are product delays there's going to be an economic hit to the industry I'm not an economist I don't know how bad it'll be I don't foresee it being doom and gloom everything's over it's all like it's the end I'm not really in that camp so when I see currently switching over to I guess informed opinion from some of the so that we shared I see the industry being on track to lose one to two quarters of progress and that's why I'm reaching economic impact to the industry we're gonna see a slowdown I'm sure the other youtubers could see a slowdown or at least less viewership than they might have otherwise and we've already seen it in an indirect way because we've noticed viewers are not able to get to the content that isn't related to the virus which is in part a YouTube thing it's in part timing I guess but you're looking at a challenge where there's probably more content right now being pushed to YouTube then typically would be the case and a lot of its around one topic and the way the algorithm works is it sucks you into a topic and then it it doesn't spit you back out again until you stop watching that content so people are probably stuck in this vacuum of virus content and this is our way of getting them back is basically what I'm saying but hopefully it provides some actual value for you and I apologize if you didn't want to hear more virus discussion from our channel because I didn't really and I get it I don't really want to do it I'd rather do computer stuff but at least this has computer news in it so anyway it looks like we're on track to lose a couple quarters of progress here as an industry computer launches hardware launches stuff like that most the news organizations right now are talking nonstop about human malware because if it bleeds it leads and they are more doom and gloom oriented so just to remind it from us it's not the end of the world there will be a delay we would advise still that you don't just buy a computer hardware because you want to make sure you get it before it's out of stock because there's gonna be more especially because there's new silicon launching this year anyway whether or not it's delayed so unless you need something now you shouldn't really be buying but that's pretty much always true alright so we've tried to stick to the facts and the numbers for this to avoid encouraging any sort of panic and like before advisors taking a rational approach focus on things outside of buying a computer it's just not that important you can always get it later in the year the biggest problem here ultimately is supply chains and the lower down supply chain availability and factory uptime and that is improving right now we know that a lot of the factories have gotten their workforce backup from as low as 10% and from furloughing if that's an appropriate use from putting their employees on furlough for two days a week they've kind of covered from that now it's a matter of getting supply and that's gonna take some weeks as well but things are recovering at least in the production side of the industry now it's gonna be a matter of getting the schedule back on track and that's gonna be it for this one thanks for watching check out the main channel go watch our factory tour series because a lot of people were excited about it and then I think it wasn't really getting cycled as a quick side note we're going to have a video on our secondary channel G on Steve where I'm just riding around on an e-bike talking about the situation currently as it impacts YouTube in our content production so we'll link that below if you want to check that one out and I go to store my cameras axis net or patreon.com slash cameras Nexus tops I directly thanks for watching we'll see you all next time\n"