Chip Shortage is Expected to Cause Major Price Hikes on Gadgets and Other Tech Products

Sophie Webster, Tech Times 21 June 2021, 12:06 pm

Chip shortage began in 2020 during the peak of the coronavirus pandemic. This could push up the prices of tech items such as printers, laptops, and tablets, and it is threatening to do the same to other devices, including smartphones.

Chip Shortage's Effect on Tech Price

Suppliers are now affected by the shortage of the key materials needed in chip-making as the industry rushes to meet the constantly rising demand for devices and fix the supply holes.

As a result, many of the large chip makers are now raising the prices on the brands used for making computers and other gadgets. Industry officials say that the increases may continue.

Also Read: Huawei: US to Blame for Global Chip Shortage That Could Trigger Economic Crisis

The issue has now trickled down to the consumers. Prices of popular brands of some laptop computers have increased over the past two months, among other electronics becoming more expensive at retailers.

A laptop that is made for video gamers and is made by ASUSTek Computer Inc. has increased its price from $900 to $950 on Amazon, according to Keepa, a site that tracks product prices.

Meanwhile, at the beginning of June, the popular HP Inc. Chromebook increased from $220 to $250.

HP has increased its PC prices by 8%, according to The Wall Street Journal, while printer prices by more than 20% in a year.

HP Chief Executive Enrique Lores stated that component shortages drive the increases and that the company may adjust prices further to reflect cost increases, according to Bernstein Research.

Appliances Also at Risk

South Korean tech giant Samsung stated that the chip shortage is now hitting television and appliance production. Meanwhile, LG admitted that the shortage also poses major problems for the company.

Ben Suh, the head of Samsung's investor relations, told CNBC that they are also experiencing some effects, especially around certain set products and display production, because of the global semiconductor shortage.

Suh added that they are discussing with retailers and major channels about supply plans so that they can allocate the components to the products that have more urgency or higher priority in terms of supply.

Koh Dong-Jin, Samsung's co-chief executive and mobile chief, said a serious imbalance in the supply and demand of chips in the IT sector. As a result, the company said that it might skip the next Galaxy Note smartphone launch.

According to the Financial Times, LG said that it is closely monitoring the situation as no manufacturer can be free of the problem if it gest prolonged.

Like the technology used in washing machines and smart toasters, even low-margin processors are by the chip shortage. While most retailers can still get their hands on these products now, they may face issues in the next few months.

The dog-washing businesses are also affected, according to The Washington Post. CCSI, the company that makes electronic dog-washing booths in the Illinois village of Garden Prairie, was told by its circuit board supplier that the chips are not available.

Despite this, tech companies remain hopeful, with numerous companies investing in their own chip plants. One example is Intel that announced back in March that it will spend $20 billion to build two chip plants in Arizona.