The market for mobiles, among other electronic devices, is likely to experience a price increase next year, due to an increase in production costs.
While there had already been warning signs, it now seems inevitable. A recent article by Nikkei Asia, the most famous Japanese economic magazine, has indeed blown a little wind of panic in the high-tech world. For good reason, he reports that one of the most important players in the sector, TSMC (Taiwan Semiconductor Manufacturing Company), as the number 1 supplier of electronic chips in the world, will make a significant increase in its prices. The strongest recorded for a decade. A consequent increase in its prices, up to 20%, which would be justified by its desire to invest no less than $ 100 billion until 2023 to increase its production and thus meet growing demand, as reported CNN Business last April. But it is not the only reason
While materials and logistical needs are also more and more expensive, in view of the constant evolution of technologies, this price increase would also be a consequence of… the pandemic. Directly impacting production, slowly as in most sectors at the height of the health crisis, it indeed caused a shortage of components at the end of last year. And if it persists – manufacturers warn that it will continue in 2022, or even beyond – it is largely the fault of manufacturers, who tend to order more chips than necessary for safety. History not to suffer the same fate as Sony and its PS5, as rare as potatoes in a tray of McDonald’s fries. A practice that TSMC, therefore, hopes to stem by increasing its prices, as reported by Nikkei Asia, which quotes “industry sources “.
APPLE AND A LARGE PART OF AFFECTED ANDROID
You guessed it, if chips get more expensive, the electronic devices that use them are likely to become more expensive too. And in the mobile market, this could affect a large part of smartphones, with TSMC being the supplier of the biggest developers of mobile chips. We are talking in particular of Qualcomm, which produces the famous Snapdragon processors, the must-have for Android phones, and Apple, which offers its in-house SoCs called A Bionic
Large customers, therefore, who will certainly negotiate with the Taiwanese company, but who in view of the overall situation could thus find themselves forced to increase the cost of their products in their turn. And even to review their strategy, suggests a Counterpoint Research analyst quoted by Nikkei Asia: ” The net profit margin for smartphone manufacturers, except Apple, is only about 5 to 10%. Also, the increased chip prices will definitely push industry players to roll out more higher-end models next year to offset the cost impact, rather than focusing on entry-level and mid-range devices.
Knowing that TSMC is still dealing with orders already placed for the moment, analysts believe that the impact of its price increase will be felt from next year. Hence the title of this article: Why it is better to buy your smartphone before 2022 “. Because you can never be too careful