The global chip shortage is starting to hit the smartphone industry

The global chip shortage is starting to hit the smartphone industry
# 29 July 2021 19:32 (UTC +04:00)

A global shortage of computer chips has impacted everything from automobiles to video game consoles. And smartphones are looking like they’re next on the list, APA reports citing CNBC.

Semiconductors have been in short supply this year, due to a number of reasons including factory closures resulting from the Covid-19 pandemic and heightened demand for consumer electronics.

Automakers have been especially impacted by the shortage, with companies like General Motors and Ford reducing or even halting production of certain vehicles.

Video game consoles are also being affected, with gamers struggling to get their hands on the new Microsoft Xbox Series X and Sony PlayStation 5 systems.

Smartphones have so far been mostly shielded from the fallout, thanks to manufacturers like Apple and Samsung stockpiling critical components.

“The automotive industry doesn’t run at the same cadence as the smartphone business,” Ben Wood, chief analyst at CCS Insight, told CNBC. “They saw the problems more slowly than the smartphone guys.”

Carmakers rely on bigger, older chips while phone makers are using the latest processors, Wood said. Smartphones are also sold in far higher volumes than vehicles, making them a preferred customer of suppliers.

Meanwhile, “smartphone companies didn’t drop their demand for chips as the automotive sector did when they expected a drop in demand for cars” at the start of the pandemic, Syed Alam, Accenture’s global semiconductor lead, told CNBC.

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