Chip Shortage Hits Consumers

Issue 76

With no end in sight for the global chip shortage manufacturers have begun raising prices for chips of all kinds as demand continues to skyrocket.  Consumers are beginning to feel the impact of the chip shortage as producers of computers and other electronics increase the price of their products as well.
The prices for several PCs on Amazon’s website have risen throughout June and HP Inc. has increased the prices of their PCs by 8% and the price of their printers by more than 20%.  Dell Technologies Inc. and ASUSTek Computer Inc. have also increased their prices as it seems this will be the general strategy for companies across the board.
Companies want to assure their customers that the price increase is not an attempt to make any additional profit, but it is merely a response to electronic component costs increasing by 15-40%.  The same cost increases are affecting the car industry as new cars are requiring more and more chips to create.  New cars will have a higher price to make up for a lack of inventory.

While chip manufacturers across the globe are trying to keep up with demand, it is likely that this issue will persist for the foreseeable future.  Over the past year, the number of chips being sold on a global scale has increased by nearly 27 billion which is roughly a 25% increase, and yet supply still runs short.  In addition, Dale Ford, the chief analyst at the Electronic Components Industry Association stated that “Raw-material costs have gone up more recently, and I think people are now saying this is not a temporary situation.”

Source: Bloomberg