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Global chip shortage expected to hit phone shipments this year

Global chip shortage expected to hit phone shipments this year

Note: This article was first published on 14 Mar 2021.

Major phone makers such as Samsung may see phone shipments fall this year due to a global chip shortage. 

Industry sources told Reuters that Qualcomm is struggling to meet demand for its processor chips used in mobile devices. Sources claim that Samsung is facing a shortage of Qualcomm’s chipsets which will affect the production of mid and low-end models.

In addition, the production of flagship chipsets such as Snapdragon 888 are reportedly affected due to a shortage of subcomponents. Xiaomi’s vice president, Lu Weibing, described the chip crunch as “an extreme shortage”. 

The chip storage, which was caused by a surge in demand for consumer electronics and the Covid-19 lockdown, first hit the auto industry and affected the manufacturing of chips on older technology. However, the problem has spread to other parts of the supply chain.

This in turn caused panic buying among companies, which caused further strain on the capacity and increase costs of all components. While some companies are placing bigger orders to secure stocks, others turned to older chipsets as alternatives or delayed their product launches indefinitely. 

In late November 2020, Bloomberg reported that Apple was facing shortages in LiDAR parts and power chips for the iPhone 12. This caused delivery of new iPhone orders to be delayed by several weeks. 

Source: Reuters

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