COVID-19 Impact on Electronics Cleaning Solvents Market

The chemical sector plays an important role in the production and supply of chemicals for various end uses such as packaging, medicines and electronics. One such product is electronics cleaning solvents. With COVID-19 decimating the electronics and chemical industries in China, production and demand for these solvents has declined. Production facilities for electronics goods and components have shuttered with non-availability of work force and logistical loopholes. Consequently, this has impacted the demand for cleaning solvents used in the circuitry of electronics and electronic components. In terms of region, Asia Pacific is anticipated to get highly affected by the pandemic. With China being the epicenter of the disease and the production hub for chemicals and electronics, solvents industry will see a significant downturn in the near term. China till now was one of the largest nation for exporting and importing of industrial solvents in the world. The pandemic has shape-shifted dynamics within the chemicals sector of China and the rest of the world with knock-on effects from supply chain disruptions.

Market Stats

5.2%

Pre COVID-19 2020 Forecast

4.4%

Post COVID-19 2020 Correction

120

Expected BPS Drop

Q1 2021

Expected Recovery

Evaluating Situations – Learning from the Past

The SARS outbreak of 2003 left economies of 26 countries reeling with its impact. Its adversarial effects were felt on the chemicals and its ancillary industries. However the impact was relatively manageable and short-lived owing to the disease being limited in its spread. COVID-19 on the other hand has led to a tumultuous downturn with its lethality, reduced factory outputs worldwide and disturbed supply chains. Today the economic landscape for electronics and its cleaning solvents in more volatile and less favorable with strained US-China relations, trade wars and global restrictions on the movement of people and goods. Sluggish demand for cleaning solvents from end-use electronics plants are set to continue as countries struggle to contain the deadly pandemic. The market for electronics cleaning solvents will witness an L-shaped recovery curve as the electronics industry starts to bounce back by the third quarter of 2020 and quarantines are lifted. Our analysts predict that demand for electronics will heighten with major footfalls at electronic retail outlets. This will have a cascading effect on supply of electronic cleaning solvents in sync with demand.

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Succeeding Amidst & After the Crisis

Electronics cleaning solvents are steadily emerging as a one-stop cleaning solution for PCBs. Production hubs worldwide are reporting a tighter supply of memory chips, temperature sensors and PCBs amidst pervasive lockdowns. However, this has been offset with many regions getting the green light to ramp up production for medical electronic devices and equipment. This will proliferate demand for electronic cleaning solvents and pharmaceutical solvents. Some companies are setting an example through arbitrage by hoarding components and sizeable inventories by keeping track of historic patterns of customers’ orders. Well integrated supply chain networks with their chemical intermediaries is also helping these companies stay afloat. Simultaneously the solvents industry will see continued demand for other end uses such electronic medical devices and equipment to fight the pandemic. Concurrently, a large part of the workforce is working from home. This will fuel demand for electronics cleaning solvents for laptops, PCs and mobile phones. 

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Expert Opinion

Sudip Saha, Research Director

"We anticipate governments to tighten regulatory requirements for the use of solvents once the pandemic abates. Environmental concerns and worker safety will give rise to vapor degreasing processes that will offer more lucrative possibilities and outperform conventional cleaning solvents. Moreover, many electronics companies are steering consumers away from traditional solvents and are urging them to use disinfectant chemicals in the form of wipes for component protection and, as an added safety measure against the virus. "

Nikhil Kaitwade, Practice Lead

"The duration and severity of the outbreak are still to be seen. Mobility restrictions are the main limit to the pace of recovery. Once the pandemic is contained and production and outflow of both electronics and solvents will start to see a normal trend. As people adopt a more cautious approach, we also foresee a high demand growth for water based solvents for their low toxicity and non-VOC properties. "

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Harish Tiwari

Harish Tiwari

Global Head - Business Development

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