Chinese company Xiaomi warns about price increases for electronics. The reason is the still ongoing Covid 19 coronavirus pandemic and also the chip shortage, which arose also as a result of the semiconductor crisis.
Chip shortage and an industry crisis
The economic impact of the global shortage of available chips, which has been ongoing for several months since year 2020, we can feel soon as smartphone users as well. Smartphone manufacturers will have to continue dealing with higher production costs.
The chip shortage initially affected mostly the automotive industry. This even led to shutting down some production plants in the USA, but also in Europe. A few weeks to months ago, we could see steps taken by some governments to boost production. However, it is clear that these steps have not brought the desired results yet.
Chip manufacturers are continuously dealing with a growing number of orders and requirements. According to the latest information, it seems that the impact of the chip shortage is also being felt by smartphone manufacturers. As a result of increased costs, the final retail price could rise, which the consumer will pay.
Xiaomi and rising prices
Xiaomi company president Wang Xiang said that his company is facing a problem of increased production costs due to a shortage of semiconductors for smartphone production.
Buy Xiaomi smartphones at low prices while you still can
Based on available information, there is a high likelihood that increased production costs will translate directly into higher prices for some future smartphone models. Xiang also says that Chinese Xiaomi, thanks to profits from the fourth quarter of 2020, will be able to continue offering competitive prices and will also look for ways to optimize its manufacturing processes.
Some chip manufacturers announced plans to expand their capacities, but the impact on global chip supplies may not be felt until after two years due to the complex chip manufacturing processes. In general, however, chip manufacturers are trying to fulfill outstanding orders from different customers. The current global shortage may last until the end of this year, with an inflationary impact on consumers.
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