IoT & Embedded Technology Blog

Amid Automakers’ Supply Chain Slowdown, Will Embedded OS Vendors Share the Same Fate?

by Rob Shapiro | 04/24/2020

The COVID-19 pandemic has caused delays in manufacturers’ supply chains across business segments, stopping several key consumer facing industries in their tracks. The automotive sector faces particular financial losses due to factories temporarily shutting down to mitigate the spread of infection, as well as slackened demand for new car purchases during the pandemic. Embedded operating system vendors monitor the global circumstances closely, with a keen eye on the automotive market which has long been an essential source of revenue for certain vendors. As outlined in VDC’s forthcoming report, “The Global Market for IoT & Embedded Operating Systems,” the automotive vertical market rose to the leading revenue share in the overall market in 2018. Despite the potential ongoing threat of the coronavirus, many car manufacturers have begun to reopen production facilities with modified workplace practices, in an effort to adapt to the current situation.

Volkswagen already successfully reopened 32 of its 33 plants in China, with no reported cases of COVID-19 by its employees. During the week of April 20, 2020 the company resumed production in Zwickau, Germany and Bratislava, Slovakia, to be followed by other plants in Germany, Portugal, Spain, Russia, and USA the week after. With over 100 new workplace practices for employees, including daily temperature checks and uniform changes before arrival, this process serves as a primary example of what manufacturing facilities will look like in the near future. Other car manufacturers such as Toyota, Hyundai, Daimler, and Volvo, all began to resume factory operations in Europe with similar timelines.

However, all of these reopened production facilities are working at significantly reduced capacity. As compared to three shifts on average, they are running only two shifts or even one. Additionally, factory workers will need a considerable amount of time to adjust to the new disinfection and distancing measures at their facilities. How will the recovery process affect embedded OS vendors and the rest of the automotive software supply chain? What will happen to the rapid growth in the embedded automotive market? To what degree will other vertical markets be affected by the pandemic in the embedded OS ecosystem? These questions and more will be addressed in “The Global Market for IoT & Embedded Operating Systems” report.

To learn more, view our 2020 research outline here.