According to foreign media reports, during the COVID-19 pandemic, TVs, laptops and tablets are in great demand because people use Zoom to work and study, Skype to socialize, and watch Netflix for a long time to ease Concerns about the blockade. But all this extra screen time also helped start a tight supply of semiconductors, leading to soaring prices for some technology products-firstly TVs.
According to data from market research firm NPD, in recent months, the price of large-size TVs has soared by about 30% compared with last summer. This jump is a direct result of the current chip crisis and highlights that solving this problem is more complicated than simply increasing production. It may be only a matter of time before other gadgets that use the same circuit-laptops, tablets, and VR headsets-experience similar price shocks.
Some manufacturers have already flagged potential price increases. Taiwanese computer manufacturer Asustek said on its March quarterly earnings conference call that the shortage of parts will mean "further upward price increases", which may affect consumers.
Synaptics’ CEO Michael Hurlston said: “The prices of these components must be - unfortunately - rising.” The company sells integrated circuits used to control touch-screen displays to consumer electronics manufacturers. "In some cases, we will pass these costs on to our customers, and we have also heard that they will pass on these price increases to their customers."
Although the entire semiconductor industry is experiencing tight supply, those integrated circuits related to displays pose special challenges. Since they are not particularly advanced, these circuits are usually manufactured by chip factories that are several generations behind the cutting-edge technology. Since chip manufacturers focus on building more advanced manufacturing plants to produce more valuable components, there is little incentive to invest in the capacity of older facilities. Even in the case of a surge in demand, it is impossible to produce more products.
Various devices have been affected by the shortage of chips. Sony told analysts this week that the PlayStation 5 will be in short supply until 2022 due to tightening. Companies that act as electronic component brokers say that the prices of certain components have jumped several orders of magnitude; voltage regulators used in countless products usually cost 50 cents, but they sell for as much as $70. But at the consumer level, products that need to display integrated circuits first felt the impact, and the most serious impact, because of the limitations of these factories.
"The news I heard recently is that the inventory has been exhausted," said Peggy Carrier, vice president of electronic component supplier AVNet. "Therefore, these new prices will impact retail stores and consumer consumption."
Although this is a type of integrated circuit, its impact is widespread. Paul Gagnon, senior research director for consumer devices at analytics company Omdia, said: “Anything with a built-in screen will be affected by these price increases.” He said this includes PC manufacturers who can avoid it by selling devices at the same price. Increase in price, but less memory.
Paul Collas, vice president of products at Monoprice, an electronics retailer, said the company has been affected by component shortages. He claimed 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 advance payments to partners to ensure that long-term parts are guaranteed to support our supply requirements."
A series of factors have contributed to an unprecedented shortage of chips. The new crown pandemic has triggered an upsurge in demand for home electronics and cloud services, and the economic slowdown has also caused some industries to seriously misjudge the decline in demand.
This impact has gone beyond traditional consumer technology. In particular, automakers were caught off guard after the expected reduction in sales. After preemptively canceling orders for semiconductor components, many automakers had to stop production and wait for supply reinforcements. Disruptions in the broader supply chain have also caused harm, including a fire in March that closed a Japanese factory that produces a range of different semiconductor components, including display integrated circuits.
Many experts predict that the shortage of semiconductors will last for more than a year, and it may lead to a re-division of the global chip manufacturing landscape. This shortage highlights the importance of chip manufacturing to many industries, and the most advanced chips are essential to progress in key areas such as artificial intelligence, 5G and military technology.
Intel, the leading chip maker in the United States, has fallen behind competitors such as Taiwan’s TSMC and South Korea’s Samsung in recent years, but the company plans to invest heavily in an effort to regain its leading position. The US government has also proposed a $50 billion stimulus plan for the US chip industry in an effort to strengthen US chip manufacturing capabilities.
However, Hurlston of Synaptics, a circuit manufacturer, said this is not helpful to the current situation. "This is just a simple question of economics," he said. "The supply is limited, and we are all vying for it."
