Recently, many manufacturers have been suffering from the chip shortage problem. The latter covered many fields starting from the automotive industry and reaching to PC, smartphone and other industries. Many of them even have to reduce production to cope with the shortage.
In the past, when commodity supply and demand were unbalanced, prices were fluctuating. In the case of chip shortages, the price of graphics cards has almost tripled. In addition, the price increase of processors, memory and solid-state drives is also obvious.
Not long ago, it was also reported that TSMC, the world’s largest semiconductor foundry, will raise the foundry price of 12-inch wafers. Starting April, each piece will increase by about $400, an increase of 25%, and it will be adjusted quarterly.
Other chip manufacturers are also increasing prices for their products.
Why This Happened
Affected by the epidemic, major factories around the world have shut down operations and reduced production capacity. Coupled with the change in the way people work and study during the epidemic, the increase in home office work and online classes has led to an increase in demand for electronic consumer products such as laptops and tablets. This has led to a surge in demand for chips.
Say, in 2020, global laptop shipments hit a record high, exceeding 200 million units for the first time. This drove to a ship shortage. Plus, as said above, many chip makers had reduced production.
Smartphone Prices Are Expected to Rise Drastically
When looking at the prices of smartphones launched in the first quarter of 2021, we can see that the prices are still relatively stable. Some manufacturers even launched ultra-high cost-effective smartphones, such as Realme and OnePlus.
But the chip shortage problem is not solved. So it’s not hard to foresee that the manufacturer will have to increase prices for smartphones. Many China-based first-tier smartphone makers have already warned about this.
Say, Xu Qi, president of Realme China, said that due to the shortage of raw materials such as chips, batteries, smartphone prices may fluctuate in the second half of this year.
Prior to this, Lei Jun also said in an interview that not only smartphone chips are currently out of stock. Also, he added that this shortage may last for two years. Consumers may feel that consumer electronics products are becoming more and more difficult to buy and more expensive.
Both manufacturers are closely cooperating with Qualcomm and MediaTek. We mean such statements come from the US and Taiwan first.
But if you think this wouldn’t affect the smartphone market, you are in a deep confusion. the case of a 30% increase in chip cost and short supply, the price increase of smartphones may be inevitable.
We think major smartphone manufacturers will carry out price adjustments in June this year. So most of the smartphones launched in the second half of this year will cost more than similar products launched a year ago.