How Does Chinese New Year Affect Electronics Manufacturing

Chinese New Year 2019

Monday January 28th – Tuesday February 19th


Short Version

Chinese New Year will affect the delivery of your assemblies. Unexpected delays will occur. If you have not already placed your order for assemblies, then it’s almost guaranteed that your delivery will be impacted by CNY. If you really need your assemblies before CNY then you can pay to have your order expedited but that’s still no guarantee that your order won’t be impacted by CNY. The earlier you place your order though, the better the chance of getting your assemblies on time.

We usually do not see things get back to normal with deliveries until nearly 1 month after the end of CNY.

Long Version

China’s Spring Festival, often referred to as Chinese New Year, is an annual event usually held somewhere around the end of January to mid-February. While it’s probably a time of enjoyment and celebration for the people of China, it’s usually a time of great stress and frustration for the manufacturers that rely on China’s great manufacturing supply chain.

As a manufacturer based in the United States you might think we are insulated from this holiday. However, the truth is that no matter where your product is made, China is likely somehow involved in the supply chain that ends up being a part of your final product. But even if they somehow aren’t (they most likely are) their shutdown will still have an impact on the delivery of your product.

The world only has just so much capacity to manufacture things. China has the largest portion of that capacity. So when they shut down just about their entire manufacturing operation, this is going to have some impact on the rest of the global supply chain. Manufacturers in the United States are going to see their orders increase substantially. But even with working overtime and weekends, they could never dream of compensating for the total loss of production in China.

When China stops accepting orders at the beginning of CNY, demand for product, and thus orders for goods, does not slow down. So orders to domestic manufacturers see a large increase. Their peak capacity will be reached very quickly, especially considering every manufacturer in the United States is already running a lean shop at very near peak capacity. So when they see orders increase, lead-times start to get extended.

One of the primary goods that we order from China is bare PCB’s. During their shut down, our customers continue to order assemblies. Once our board suppliers get back to work, they are going to have an enormous backlog of orders from being away for 2 weeks. It will take them a long time to work through that backlog. So even though CNY is only a couple weeks, this does not mean that orders placed during CNY will begin shipping right away after the end of CNY. We usually do not see things get back to normal with deliveries until nearly 1 month after the end of CNY.

While our friends on the other side of the Earth are getting some well deserved time off to see their family and enjoy their holiday, the rest of us will do our best to keep customers informed about how this holiday will impact their supply chain, and do our best to handle the flood of material that hits us once the material begins to ship to us again.

As always, if you have any questions, we’d love to hear from you.