Tech Prices Surge Due To Global Chip Shortage

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The price of larger TV models has risen up to 30% in recent months due to the current chip shortage plaguing the tech industry and already affecting consumers.

Analysts say it’s only a matter of time before other devices with the same circuitry as laptops, tablets, and VR headsets become more expensive.

These display-based integrated circuits are some of the components that have been severely affected by the chip shortage in the semiconductor industry, as they are manufactured in factories that produce chips that lag several generations behind the latest ones.

There was very little incentive to invest in older plant capacity, which makes it extremely difficult to waste more of these components even as demand increases.

Sony has announced that the PlayStation 5 will remain on limited supply until 2022 due to the shortage.

Semiconductor component brokers report price jumps of orders of magnitude. Voltage regulators, which are used in many technology products and normally cost 50 cents, are now being bought for up to 70 dollars. Products that need integrated circuits are feeling the effects of the shortage most heavily due to factory restrictions.

Several mitigating factors have contributed to the current chip crisis: the pandemic triggered a surge in demand for home electronics and cloud services, as more people stayed at home; and the subsequent slowdown also led certain industries to misjudge the decline in demand.

Automakers are also suffering from falling sales and a production freeze due to shortages.

Geopolitical tensions between the US and China have also contributed to the situation, as the US imposes sanctions on large Chinese technology companies such as Huawei and ZTE, blocking their access to sophisticated chips and causing them to freeze much of the remaining supply as far as possible.

Experts expect the semiconductor shortage to continue well into 2022, underscoring the value of chip production for various industries, particularly in key areas such as AI, 5G, and military technology.

The US government had proposed a $50 billion stimulus package for the US chip industry to bolster the capabilities of the US chip industry, which had fallen behind countries such as South Korea and Taiwan.

For more information, read the original story in Arstechnica.

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