Tech

Chip shortages are starting to hurt consumers. The price can be high.

The global chip shortage is pushing up the price of items such as laptops and printers, and could do the same for other best-selling devices, including smartphones.

As the industry responds to rising demand and rushes to close supply holes, price increases are snowballing through chip manufacturing suppliers and key materials. As a result, many of the world’s largest chip makers are raising prices for brands that make PCs and other gadgets. Industry insiders say the growth is likely to continue.

Consumers are beginning to feel a pinch. Prices for popular models of some laptop computers have risen in the last two months, and other electronics have become more expensive in retail stores.Laptops for Video Gamers — Made by Taiwanese Manufacturers

ASUSTek Computer Co., Ltd.

-It

Amazon

According to price tracking site Keepa, this month’s bestsellers have risen from $ 900 to $ 950.Popular cost

HP Co., Ltd.

Chromebooks rose from $ 220 in early June to $ 250.

According to Bernstein Research, HP has raised consumer PC prices by 8% and printer prices by more than 20% in a year. HP CEO Enrique Lores said the increase was due to a shortage of parts and could further adjust prices to reflect increased costs.

Other PC makers are getting the same attention. “When we think about increasing the cost of a component, we adjust the price as needed.”

Dell Technologies Co., Ltd.

Chief Financial Officer Thomas Sweet said in a recent earnings announcement. ASUSTek executives in May said the company reflected rising component costs in its prices.

HP has raised the prices of consumer PCs and printers over the past year.


Photo:

dycj / Imaginechina / Associated Press

Some electronics are already rising in price, but retailers can decide whether to get shoppers to pay or absorb some of the price increase, so they can measure a wide range of consumer impacts. Is often difficult, analysts say. Bernstein analyst Toni Sacconaghi said the HP price increase reflects the lack of regular discounts, not a full price increase.

Chip executives claim they aren’t taking advantage of the shortfall to increase profits, and price increases only reflect the rising costs companies are paying. “We’re not doing anything about pricing using this cycle, unless we’re paying more for additional supplies. We’re telling that,” said Chipmaker CEO. , Says Vincent Roche.

Analog Devices Co., Ltd.

Said.

“We see cost inflation,” said Hocktan, CEO of.

Broadcom Co., Ltd.

Specializes in wireless communication circuits used in

Apple Of a corporation

With iPhone

Samsung Electronics Co., Ltd.

Flagship handset. Customers understand the situation and are willing to get angry at higher prices, he said in a phone call with analysts this month.

According to industry insiders, the cost of various things such as silicon wafers, which are the components of chips, and the resins and metals used to manufacture them, is rising.

Digi-Key Electronics, one of the largest electronic component distributors in the United States, has raised the price of semiconductor-related components by about 15% this year due to pressure from the supply crisis, but is trying to keep prices as constant as possible. .. Stein, vice president of global supplier management for the company. Currently, the cost of certain components is as high as 40%, he said.

Broadcom is one of the companies that is experiencing cost inflation.


Photo:

David Paule Maurice / Bloomberg News

Many factors are driving a surge in the desire for chips, which is causing a shortage. Tensioned supply line It’s still confusing from the pandemic.Man Buy a record number of laptops Working and studying at home during a pandemic.Demand for medical devices is increasing, and ultra-high-speed 5G mobile networks are becoming widespread. Encouraging people to buy new smartphones It can take advantage of speed boost.

According to data from World Semiconductor Trade Statistics, a non-profit organization that represents many chip makers, the number of chips sold worldwide reached nearly 100 billion in April. Approximately 73 billion shipped in January 2020, just before the pandemic, reflects how the industry has risen to meet demand.

Computer memory contract prices have risen about 34% since the beginning of last year, according to data from Taiwan-based research firm TrendForce. Also, more time was spent playing computer games during the pandemic

Nvidia Co., Ltd.

A graphics card that can change more hands than the original retail price.

The more time spent playing computer games has spawned a secondary market for Nvidia graphics cards.


Photo:

tyrone siu / Reuters

Rising gadget prices are part of a broader rise in inflation in the U.S. economy As growth recovers from the pandemic Supply chain turmoil continues. And so far, the rise is not as steep as the rise of some other commodities. According to US government data, prices for computers and other electronic devices rose 2.5% annually in May, the largest increase in more than a decade. May prices rose significantly by 5% due to the sharp rise in energy prices.

The rise in chip prices is especially noticeable on some so-called microcontrollers. These microcontrollers are generally smart for a variety of gadgets, appliances, and even automobiles. Supplyframe Inc, which tracks the prices charged by distributors. Said that the median of the top 20 best-selling microcontrollers has risen by more than 12% since the middle of last year.

There is also a secondary price effect due to a shortage of chips outside the technology industry. Automakers had to cut production Because there are not enough tips.When Low inventory increases the cost of new vehicles..

Price increases in the tip industry itself are not uniform. According to industry data, the price of chips for all semiconductors shipped worldwide has changed on average since the beginning of last year, despite some sub-sectors including wireless communications and consumer electronics chips rising. Is not …

Daleford, chief analyst at the Electronic Components Industry Association, said price data may not yet reflect the latest cost increases seen across the semiconductor supply chain. Prices are also often set on long-term contracts and are delayed when adjusted to the power of the market, he said.

“I think people are saying that raw material costs have risen lately and this is not a temporary situation,” Ford said. “Price increases will last long.”

More chip shortage coverage

Further coverage of the semiconductor market selected by the WSJ editors.

The global chip shortage is affecting the time it takes to get a car out of the parking lot or buy a new laptop. The WSJ will visit a manufacturing plant in Singapore to see the complex process of chip manufacturing and how one manufacturer is trying to overcome the shortage.Photo: Edwin Chen of The Wall Street Journal

Write to Asafitch asa.fitch@wsj.com

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Chip shortages are starting to hurt consumers. The price can be high.

Source link Chip shortages are starting to hurt consumers. The price can be high.

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