Chip shortage forces Samsung to raise component prices

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Kris Carlon / Android Authority

TL;DR

  • A report suggests that Samsung is fighting global chip shortages by raising component prices.
  • In some cases, the increases can reach 20%.
  • More expensive components will mean more expensive consumer products.

We are still in the midst of a global supply chain shortage when it comes to electronics. Everything from cars to laptops to smartphones are delayed, rolling out in fewer numbers, or lacking the features you’d expect.

Unfortunately, this problem does not go away. Now, in response to the global chip shortage, it looks like Samsung is ready to make some big changes. According to a report by BloombergSamsung could prepare price increases of up to 20% for the components it creates.

See also: The best Samsung phones

Although Samsung is the largest smartphone maker in the world, it doesn’t keep all of its manufacturing capabilities to itself. Many companies, including Apple, rely on Samsung to manufacture components that end up in various products. It looks like Samsung is ready to start charging more money to help cover its increased chip shortage costs.

Ultimately, these increases will trickle down to you, the consumer. If companies have to pay Samsung more to make their products, those products will inevitably become more expensive.

Shortage of chips could have a harsher effect on star products

Over the past year, Samsung has kept the price of its components relatively stable. However, pressure from all sides – the war in Ukraine, lockdowns from China, supply chain shortages, etc. – obliges the company to react. Other companies, such as Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp., are also raising their prices. It was only a matter of time before Samsung, one of the biggest players, did the same.

This will have two major effects on you, the consumer. First, companies that can afford to pay even the highest price increases will do so if it allows them to release their star products on time. A deep-pocketed company — Apple, for example — would rather pay steeply increased component prices if it means the next iPhone is released when consumers expect it to be released. This means that these large companies are likely to significantly increase the prices of their large-scale products in the short term.

The second effect is that, overall, electronics prices will also start to rise. You shouldn’t expect a 20% increase overnight, but increases are inevitably on the way as businesses need to make more profits to cover these higher expenses.

It will likely be months before consumers feel these increases. However, with the global chip shortage not going away any time soon, who knows what else might be in store for us.

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