Robert Triggs / Android Authority
TL; DR
- Higher production prices could further exacerbate the global chipset shortage through 2022.
- According to a new report, chipmakers will increase manufacturing fees over the next year, resulting in more expensive chipsets and devices that use them.
- This could mean that smartphones, computers, and other electronics could cost more in the future.
The global chipset scarcity had a profound impact in 2021 as some OEMs struggled to meet demand in the wake of the pandemic. But this crisis could get worse, especially for consumers. A new report suggests that chipsets, that is, smartphones, could be further exacerbated by higher prices when increased production fees go into effect next year.
According to a Nikkei Asia Taiwanese semiconductor company TSMC – the maker of chipsets used by Apple, Qualcomm, and Nvidia – is reportedly set to increase its manufacturing fees by up to 20% in 2022. The increase is reportedly due to several factors, namely overwhelming demand and logistics in the race for smaller manufacturing processes. Other chip manufacturers are also feeling this pressure.
The report also suggests that Qualcomm and MediaTek’s cost of sales increased 60% and more for electronics between October 2020 and June 2021, respectively. Smartphone and computer companies that rely on the products of these chipset companies are likely to have to increase their costs to make up for losses.
Higher prices, more flagships
The rising prices could also affect the product ranges of the smartphone companies. Nikkei, quoting an analyst at Counterpoint, suggests that companies could bring more high-end products to market to make up for their losses. This would mean fewer new mid- and lower-priced devices are available for consumers on a budget.
Interestingly, increased smartphone prices were not a hot topic in 2021 as they have been in the past. Samsung even cut the price of some of its flagships this year compared to last year. The Galaxy S20 series started at $ 999 in the US, while the Galaxy S21 arrived at $ 799. The Galaxy S22 may not continue this trend. In particular, Google has also confirmed that its upcoming Pixel 6 Pro would be “expensive”.
It is unclear how much soaring chipset costs will affect smartphone prices or whether OEMs would be willing to take a bigger blow to shield consumers. Still, you can count a few cents more to be able to afford this new flagship in 2022.
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