The world is witnessing a global shortage in the availability of chips, which is invariably causing the prices of gadgets like laptops and printers to rise insanely, and also the price fluctuation of smartphones and other devices used by regular users are also at high risk. The reason behind this is due to the gap that has been created between the rising demand and supply, and as a result, the makers are also constantly increasing the prices of their devices, which may keep increasing as time goes by.
Statistics show that the prices of consumer PCs from leading brands have risen up by 20% this year as compared to the 8% rise that was computed last year. This is solely due to the component shortage that is being faced by these leading brands, which is having a direct impact on their consumers. This impact felt on the consumers may sometimes be difficult to measure, as retailers can wish to decide whether to make the consumers pay the increased amount or to absorb some of the increased prices.
It may be sometimes conceived that such practices may fatten the profits, but the prices usually reflect the higher costs that their companies are paying. The companies are paying more for the additional supply that they have already got on board. Industry officials have also reported that the increase in prices is also due to several other factors, such as silicon wafers, which form the building blocks of chips, and also the resins and the different metals that are used in the manufacturing process.
There has always been a striking appetite for chips, but the situation of shortages has been promoted by strained supply lines of chips that are still in a disorderly manner due to the pandemic. Nearly 100 million chips have been sold in and around the world in the month of April, and around 73 billion chips were shipped in January of 2020, which reflects how the industry has boosted rapidly to meet its demand. The huge spike in sales of gaming computers has also led to the rise in prices of computer memory by 34% more than it was before the pandemic struck the world.
The US has seen the highest rise in prices of computers and other electronic gadgets with an annual rate of around 2.5% more than any other jurisdiction in the world and this was the largest jump in over two decades as reported by the US government data. Secondary pricing effects have also impacted cars because they are also facing a shortage of chip availability. Thus the inadequacy of inventory and the prices of new vehicles have also increased to a greater extent. It is anticipated that car manufacturers would have to commit to higher and more binding order volumes than they used to be previously to keep up with other companies who have been in the business for a long time.
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