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TVs, laptops and tablets were in high demand in pandemic Covid-19like people worked and studied through Zoom, chatted on Skype and gorged on Netflix to ease the blues of isolation. But all that extra screen time has also led to a shrinking supply of semiconductors, which has caused the prices of some gadgets to skyrocket, starting with televisions.
The price of larger TVs has jumped about 30 percent in recent months compared to last summer, according to a market research company. NPD… The jump is a direct result of the current chip crisis and underlines that fixing this is more difficult than just ramping up production. It may also be just a matter of time before other gadgets using the same circuitry – laptops, tablets, and VR headsets – experience a similar sticker shock.
Some manufacturers have already noted potential price increases. Asus, a Taiwanese computer manufacturer, said during a quarterly income statement in March that a component shortage would mean “further price increases,” which is likely to affect consumers.
“Unfortunately, the prices of these components are definitely going up,” says Michael Hurlston, CEO Synaptics, a company that sells integrated circuits for controlling touch screens to consumer electronics manufacturers. “In some cases, we pass these prices to our customers, and we’ve heard they pass these increases to their customers.”
While the supply decline is being felt throughout the semiconductor industry, these display integrated circuits pose certain challenges. Since they are not particularly advanced, circuits are usually produced in chip factories that are several generations behind advanced technology. As chip makers focused on building better manufacturing plants that produce more valuable components, they had little incentive to invest in capacity in older plants. They simply cannot be produced in large quantities, even when demand is skyrocketing.
The shortage of microcircuits has already affected a wide variety of devices. Sony told analysts this week that the PlayStation 5 will remain in short supply until 2022 due to the crisis. Companies that act as brokers for electronic components say prices for certain components have skyrocketed; Voltage regulators, used in countless products that typically cost 50 cents, have been selling for up to $ 70. But at the consumer level, products that require display integrated circuits are primarily and most affected by factory constraints.
“I recently heard that stocks were depleted,” says Peggy Carries, vice president of the company. AVNet, supplier of electronics components. “Thus, these new prices will affect retail outlets and consumer consumption.”
Although this is one of the types of integrated circuits, the impact on it is very great. “Anything with a built-in screen will be affected by a price increase,” says Paul Gagnon, senior director of consumer device research at an analyst firm Omdia. This includes According to him, PC makers were able to avoid sales growth by selling devices at the same price, but, for example, with less memory.
Electronics retailer Monocene drought-affected components, says Paul Collas, the company’s vice president of products. He claims that Monoprice will not raise prices, but may have to cancel sales and other promotions. “In some cases, we also see the need to invest more in upfront payments to partners to ensure that long lead times will meet our supply requirements.”
A combination of factors contributed to an unprecedented drought. The pandemic has sparked a boom in demand for consumer electronics and cloud services, and the economic downturn has also caused some industries to misjudge how demand will fall.
The impact was felt beyond traditional consumer technology. In particular, automakers remained indifferent due to expectations of a decline in sales. After preemptive cancellation of orders for semiconductor components, many automakers had to stop production while they await the arrival of reinforcements. Broader supply chain disruptions have also suffered, including a fire in March that shut down a plant in Japan that produces a range of different semiconductor components, including display integrated circuits.
Geopolitical tensions between the US and China have also contributed. In the past few years, the US government imposed sanctions at major Chinese tech companies, including Huawei and ZTE, by blocking their access to the most advanced chips and encouraging them to accumulate as much as possible.
Many experts expect the semiconductor crisis to last for more than a year and may contribute to reshaping the global chip manufacturing landscape. The scarcity has highlighted the importance of chip manufacturing for many industries, and cutting-edge chips will be vital to progress in key areas such as artificial Intelligence, 5G, as well as military equipment…
Leading US chipmaker Intel has lagged behind rivals such as TSMC in Taiwan and Samsung in South Korea in recent years, but the company plans to invest heavily in an attempt to regain the leading position… The US government also suggested Boosting US $ 50 Billion Chip Manufacturing in an attempt to bolster American chip manufacturing capabilities.
But, according to Hurlston of Synaptics, a circuit manufacturer, it doesn’t help in the current situation. “It’s just economics,” he says. “There is a limited amount of stock, we are all fighting for it.”
This story first appeared on wired.com…
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