The economic recession has hurt the global automotive, consumer electronics and semiconductor industries

New scenario analysis from Strategy Analytics suggests that the 2020 recession triggered by COVID-19 will devastate the global automotive, consumer electronics, semiconductor and IT infrastructure businesses before a recovery in 2021. 

The new scenario shows that the damage caused by the worst economic cycle since the Great Depression will cause real GDP in major industrial economies to plummet by more than 7% in the second quarter (33% annualized rate), with consumers and B2B companies suffering.

Harvey Cohen, President of Strategy Analytics and lead analyst for the scenario analysis, said, “The entire digital product supply chain in our homes, cars, and associated with our mobile lifestyles will suffer significant damage in this downturn, which is likely to be felt globally over the next three to four quarters. Real GDP is expected to fall by 3% in the third quarter (12% annualized rate) and not grow until the second quarter of 2021.”

“Global vehicle sales and the resulting demand for automotive electronics have plummeted since March and are likely to fall 25% in 2020 compared to 2019,” said Ian Riches, vice president of the automotive practice at Strategy Analytics.

David Kerr, Senior Vice President of Wireless and Broadband Research at Strategy Analytics, noted: “Global smartphone sales will fall 23% in 2020 before a modest recovery in 2021. This will have a huge impact on 5G adoption due to service delays in Europe and reduced consumer demand for expensive new 5G devices in North America and China. The supply chain in China has recovered, but consumers’ willingness to upgrade to 5G devices and services is uncertain. A relative bright spot is network services. Home isolation is increasing demand for broadband, although this will have little impact on operator earnings in the short term.”