Global chip shortage could affect gadget prices in 2022; impact on Samsung folding phones unclear

Major chipmaker Taiwan Semiconductor Manufacturing Co. was reportedly planning a chip price hike that could cause prices of smartphones and computers to rise next year.
Major chipmaker Taiwan Semiconductor Manufacturing Co. was reportedly planning a chip price hike that could cause prices of smartphones and computers to rise next year.PHOTO: REUTERS

SINGAPORE - The global chip shortage is expected to affect the prices and availability of mobile phones and computers, especially next year, according to brands and analysts.

But it is less clear if the component supply issue has affected South Korean electronics giant Samsung's new foldable phones, which were officially launched here on Friday (Sept 10).

Some consumers who ordered the new Galaxy Z Fold3 and Galaxy Z Flip3 smartphones from Samsung's online store had their gadget deliveries delayed by a week or more.

Samsung Electronics Singapore attributed this to high local and global demand for the phones. But when asked, it did not address whether the delays were related to stock issues with the phones due to the worldwide chip supply shortage.

Mr Glenn O'Donnell, research director at market research firm Forrester Research, said that chip supply constraints result in higher prices that either need to be absorbed by the manufacturer or are passed on to the consumer.

"In short-duration disruptions, the prior is possible, but this problem is here for the next two years," Mr O'Donnell told The Straits Times.

"Thus, prices for smartphones and just about anything else are already rising. We expect these increases to exceed 10 per cent by the year end and rise even more through 2022," he added.

Major chipmaker Taiwan Semiconductor Manufacturing Co, whose clients include brands such as Apple and Qualcomm, was reportedly planning a chip price hike that could cause prices of smartphones and computers to rise next year, financial news outlet Nikkei Asia reported last week.

Apple and Samsung had earlier warned of component shortages that could affect shipments. For example, Apple had said that the constraints would likely impact the iPhone and iPad tablets in the third quarter.

But it was unclear if this would also impact the rumoured iPhone 13 expected to be unveiled on Tuesday (Sept 14).

Still, market research firm TrendForce said that revenue growth in "peripheral services" is expected for Apple. This could mean that the base price of the upcoming iPhone will be "relatively on a par" with last year's iPhone 12, HardwareZone reported.

Said Forrester's Mr O'Donnell: "I doubt the chip issues will delay the introduction of iPhone 13, but it will certainly impact availability."

Phone makers such as Apple and Samsung have also been stocking up on chips, so the phone market could have been partially shielded from the component supply crunch, CNBC reported.

Mr O'Donnell said chip hoarding helps for a time but prolonged shortage makes this practice far less effective.

"Also, brand new product designs usually require brand new chip designs. You can't hoard chips that don't yet exist," the analyst added.

For Samsung's Fold3 and Flip3, any impact from the chip shortage could also be masked because the phones cost less than previous versions. For instance, last year's Fold2 sold for nearly $2,900, higher than the Fold3's $2,400 to $2,500 price tag.