Technology sector under riks for the effects of coronavirus

The virus outbreak generated in Wuhan, China, is considered by the Fitch agency as a threat to the development of technology in the United States

The credit rating agency Fitch believes that the coronavirus outbreak in Wuhan (China) poses a risk to the entire US technology sector, not just Apple.

The firm explained that this impact is due to the fact that supply chains are very dependent on China and suppliers in the Asian country are not yet operating at full capacity due to precautionary measures to curb viral progress.

In this regard, Fitch predicted that there will be “weakness” in short-term revenues due to supply chain interruptions and lower demand from China, something that could be compensated with better capital management and increased revenue Outside the Asian country.

“If China’s manufacturing activity is normalized in one or two weeks, the effect will be transitory, but if the situation extends until March or April, the effect will be much more disruptive for the sector”, the agency said.

In this context, Apple issued a warning late Monday because the return to work after the Lunar Year in China was slower than expected, for which the firm warned that it did not expect to reach its revenue targets for the first quarter of 2020.

K. Tovar

Source: dpa

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