Xiaomi president Wang Xiang has warned that the global chip crisis could cause the company to increase prices of its products. That’s because the shortage is putting upward pressure on costs. The Chinese company is currently the third largest manufacturer of smartphones.
We will continue to optimize the costs of our hardware devices, that’s for sure. To be honest, we will do our best to offer the best price we can to consumers. But sometimes, we may have to pass part of the cost increase to the consumer in different cases.
The supply crunch can primarily be attributed to the coronavirus. The stay-at-home era caused by pandemic pushed demand for home-networking equipment and consumer electronics beyond estimated levels. This caused some businesses to stockpile, and they now have more inventory than usual. Huawei also began hoarding components around the same time to ensure survival from restrictions imposed by the US. The situation was exacerbated by the February Texas storm which impacted Samsung’s operations in Austin.
Taiwan Semiconductor Manufacturing Company (TSMC), which makes chips for Apple, has also been impacted but the Cupertino giant has not been affected so far.
The tightened supply of Qualcomm AP chips produced by TSMC is affecting everybody except Apple.” – MS Hwang, analyst at Samsung Securities.
The shortages are expected to remain a problem into next year and this could pose a problem for Apple. Hon Hai Precision Industry Co., which assembles the iPhone, has also warned that it will take time to resolve the chip supply imbalance.
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