iphone chips

Mobile phone manufacturers can’t escape! The global chip shortage began to sweep the smartphone industry

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The global chip shortage has reportedly affected many products, from cars to video game consoles, and the next product on the list will be smartphones.

This year, the global semiconductor has been in short supply for a number of reasons, including factory closures caused by the new crown pneumonia epidemic, as well as rising demand for consumer electronics.

During the period, automakers have been affected by chip shortages as significantly, with companies such as General Motors and Ford Motor both reducing, or even halting, production of certain vehicles. In addition, video game consoles were also affected, with gamers having a hard time getting their hands on the new Microsoft Xbox and Sony PlayStation 5.

In contrast, smartphones have been largely unaffected by the chip shortage so far, as manufacturers such as Apple and Samsung stockpile key components.

Research firm CCS Insight principal analyst Ben Wood (Ben Wood) told the media: “The automotive industry and the smartphone industry are developing at a different pace. They look at the problem at a slower pace than smartphone manufacturers.”

iphone chips
iphone chips

??? Wood said automakers rely on larger, older chips, while cell phone makers use the latest processors. Smartphones also sell far more than cars, making them a preferred customer for suppliers.

Meanwhile, Syed Alam, global head of semiconductors at consulting services firm Accenture, said that at the beginning of the outbreak, smartphone companies didn’t think market demand would drop as dramatically as car makers did.

Alam added: “In fact, smartphone companies benefited from the extra capacity left by automotive companies, which led to the automotive industry experiencing a chip shortage when automotive demand grew faster than expected.”

Mobile phone manufacturers can’t escape

But now, mobile phone manufacturers are beginning to feel the impact of the global chip shortage.

“Now the automotive industry and other industries are catching up and starting to recover the capacity they gave up. The competition for semiconductor supply is very fierce,” Alam said. This creates pressure on the supply of smartphone chips. “

Gartner data show that with the outbreak of the epidemic last year, the demand for smart phones weakened, and sales fell by 12.5%. However, this demand has been recovering rapidly this year with the lifting of blockades and restrictions by several countries. In the first quarter, global smartphone sales increased by 26%.

Yesterday, Apple CEO Tim Cook warned that the tight supply of silicon would affect the sales of other products such as iPhone and iPad.

Cook said the shortage is not the high-performance processors Apple makes for its devices, but chips for daily functions such as powering mobile displays and decoding audio.

Glenn O’Donnell, vice president and research director of Forrester, an analysis company, said: “although apple is one of the major customers prioritized by chip manufacturers, it is now as vulnerable to chip shortages as others.”

“Although everyone focuses on CPU (high-end chip), in fact, every device (including iPhone) contains more other chips,” O’Donnell said. Without the support of these chips, mobile phones are almost useless. “

However, wood said that so far, Apple has proved to be very flexible throughout the epidemic, which shows that Apple attaches great importance to the supply chain.

Wood added that smaller manufacturers such as Lenovo, TCL and Nokia handset maker HMD global may be struggling for supply.

HMD, which is launching some new Nokia smartphones this summer, warned that a shortage of semiconductors could pose a challenge to smaller device makers.

    HMD CEO Florian Seiche said like the press, “We’ve seen that there is an overall tightness in the supply chain. In the future, we may see that there is some kind of imbalance across the market.”

Samsung is not out of the woods yet

    Like Apple, Samsung has benefited from its scale and bargaining power. But analysts say the company is not out of the woods yet.

    Dale Gai, a semiconductor analyst at research firm Counterpoint Research, told the media that Samsung appears to have suffered more in the first half of the year.

    Earlier this year, Samsung’s semiconductor manufacturing plant in Austin, Texas, was closed for up to a month after a snowstorm caused a power outage. Meanwhile, Samsung’s plant in Vietnam also suspended operations after cases of the outbreak were detected.

    In March, Samsung Electronics said it may skip the release of its next-generation Galaxy Note phone because of a serious imbalance between supply and demand for chips in the IT industry.

Today, Samsung Electronics said the company’s second-quarter profit rose 54 percent as chip prices soared. Samsung expects the cell phone market to return to pre-epidemic levels; but also warned that the shortage of “non-memory chips” may affect the recovery of the cell phone market.

Mobile phone prices will rise

In terms of the overall impact on smartphones, guy said that the chip shortage is expected to reduce equipment manufacturers’ production by 10%. Forrester vice president O’Donnell said that the chip shortage will not have a serious impact, but it will certainly have an impact.

So what does all this mean for consumers? “The possible result is a rise in mobile phone prices and a more serious shortage of some models of mobile phones,” Donnell said

“As far as apple is concerned, you may be able to buy a high-end iPhone 12, but you can’t buy a low-end iPhone XS,” Donnell said. Other smartphone manufacturers such as Samsung and LG, as well as Chinese manufacturers such as Xiaomi, will feel the pressure. “

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