No, I seriously doubt components coming from China are infected with the coronavirus. It is the impact of the quarantine and the people who work in the factories in China who are being infected and thus factories have been closed. The loss of production will soon impact the supply of many electronic components.

“Online reports and information from industry analysts revealed that Wuhan—the city at the epicenter of the coronavirus outbreak—is a vital cog in China’s leading global role in electronics industry production of both subassemblies and finished goods for leading companies,” Fierce Electronics reported.

One of the biggest industries that will be hurt by this epidemic is smart phones. Apple has facilities in the Wuhan area and the smart phone industry is already hurting from depressed sales. Add to this that the new Apple iPhone SE2 components are largely made in the area and there could be a major pushback on its release date.

Interestingly, 230 of the Fortune 500 have facilities in the area. Fiber optics, memory and the display sectors could be particularly impacted, Fierce Electronics notes.

This is also the time of the lunar new year in China, so there was an expected lull with nearly half the population of Wuhan having traveled for the holiday celebrations. This time is also being used to work on medical remedies. The issue will be what happens after the holiday and people cannot get back to Wuhan because of the travel ban in place.

The current surplus in the display industry will help, though prices for LED TVs which have been declining since late last year are expected to rise.

Exactly how deep the impact will cut into the electronics space in 2020 cannot be estimated yet, but given the large percentage of Fortune 500 companies operating in the area, things do not look promising.

“These factories are facing shortages of both labor and key components as a result of mandates designed to limit the contagion’s spread. In the face of these challenges, top display suppliers in China have informed our experts that a near-term production decline is unavoidable,” David Hsieh, senior director, displays, at IHS Markit technology research told Fierce Electronics.