BARB JORGENSON: I’m hearing that it could go as long as April, easily. And what I’m really saying is that things may get back up normal by April. But let’s just also remember that it takes 18 weeks to manufacture a semiconductor. It’s about that amount of time to manufacture passives. Again, a lot of US brands are manufacturing out of Wuhan. I’ve heard estimates as long as six months just to get back to normal. There are also expectations that, if this is a significant delay of several months, shortages of components and materials might start to revise. I read today that a German car manufacturer has been unable to restart its production line because materials out of Wuhan are being limited. They depend on steel quite a lot, and apparently Wuhan is the number one region for the output of steel.
BRIAN SANTO: Well since you mentioned that, we’re talking about steel, we’re talking about semiconductors, can you give us a quick overview of the types of industry that Wuhan is leading in? Are there any particular types of components or any particular types of ICs and other materials that go into the high tech supply chain?
BARB JORGENSON: Yes. What I’ve heard is, industries that we see are optical electronics, semiconductors, chemicals, life sciences, biotech and food. In the high tech arena, we’re specifically talking about 3D nand and flash. We are talking about applications such as smartphones and computers.
https://www.eetimes.com/podcasts/the-outbreak-in-wuhan-semiconductors-and-sulfuric-acid/
China debt fears grow amid wave of corporate defaults
Not so long ago a Chinese bond default was barely heard of. Yet in the past two months, talk in the country’s financial circles has been of little else.
A swath of failures to repay principal or interest on outstanding bonds has sent this year’s default total to a record $25 billion and raised concerns of a looming debt crisis that could derail China’s post-pandemic recovery. It follows a period in which Chinese companies have gorged on cheap borrowing, giving the world’s second-largest economy one of the world’s most debt-dependent corporate sectors.
Nonfinancial corporate debt climbed to 159.1% of GDP in the first quarter from 152.2% a year earlier, according to the Institute of International Finance, which counts 400 banks and financial institutions across the globe as members. The ratio is the world’s second highest, behind only Hong Kong. In comparison, the proportion in the U.S. stood at 78.1%, in the euro area at 109.8%, 106.4% in Japan and 96.1% on average across emerging markets.
Now the focus is on what 2021 might bring. In the offshore market, where Chinese companies borrow in foreign currencies, about $104 billion worth of bonds will mature in 2021, 40% more than this year. Some 7.1 trillion yuan of bonds are due to mature in the domestic market, with Fitch Ratings warning that 1.15 trillion yuan of that relates to companies with excessive borrowings or weak balance sheets.