The global shortage of computer chips has reached a critical point: what will rise in price

Consumer prices are rising, and a shortage of computer chips is seriously slowing production, including at the world's leading companies such as Samsung and Ford. Writes about it The Guardian.

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Consumers are facing rising prices and shortages of goods from TVs and cellphones to cars and game consoles as a global shortage of computer chips, the "brains" of every electronic device in the world, grows. The situation has been steadily worsening since last year.

Initially, the problem was only a temporary delay in deliveries, as factories closed when the coronavirus pandemic first hit the world. However, while production has returned to normal, a new surge in demand caused by a change in habits during the pandemic has brought it to a tipping point.

Car production, investment in high-tech electric vehicles, booming sales of televisions and home computers, and the launch of new gaming consoles and 5G mobile phones have all driven demand.

Even the mighty Apple, a $ 2 trillion company and the world's largest purchaser of computer chips, spending $ 58 billion a year, was forced to delay the launch of the much-touted iPhone 12 by two months last year due to shortages.

“Chips are everything,” says Neil Campling, technology analyst at Mirabaud. — There is a real storm of supply and demand factors. Essentially, there is a new level of demand that is impossible to keep up with, everything is in crisis, and the situation is getting worse.”

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Ford recently canceled shifts at two car plants and said profits could fall to $ 2,5 billion this year due to chip shortages. Nissan plants in Mexico and the United States are idle. General Motors said it could lose $ 2 billion in profits.

Last month, Sony, which has been battling stock shortages with other console makers, said it may not hit sales targets for the new PS5 this year due to chip supply issues. Microsoft's Xbox said it predicted supply problems until at least the second half of the year.

The most striking example of the chip crisis is Samsung, the second largest buyer of chips for its products in the world after Apple. Earlier this week, the company said it may have to delay the launch of its high-end smartphone due to a chip shortage, even though Samsung is also the world's second-largest chipmaker.

"It's incredible that Samsung sells $56 billion worth of chips to others and consumes $36 billion worth of chips itself, and yet it would have to delay the launch of one of its products," Campling says.

Samsung executive Ko Dong-Jin, who also heads the mobile division, highlighted the importance of the issue, saying there is a "serious imbalance" in the hierarchy of who receives limited chip shipments.

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Car makers, which have slashed orders for chips due to a drop in sales last year, are at the back of the line. The entire global automotive industry buys $ 37 billion worth of chips. Major players such as Toyota and Volkswagen spend over $ 4 billion each.

“The cars were hit the hardest because they were the last ones at the party; If Apple spends $56 billion a year and the amount continues to rise, who will be the first to support supplies? says Campling.

The chip shortage is likely to persist for some time to come. It can take up to two years to build and launch complex factories to manufacture them, and manufacturers are in the process of significantly increasing prices for the second time in less than a year.

“There is no sign that supply will catch up or demand will decline, while prices are rising across the chain,” Campling says. “It will affect ordinary people.” Expect cars and phones to cost more. This year's iPhone will not be cheaper than last year."

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