Chip Shortage Drives Record-Level Price Increases With No End in Sight
Written by
Yaël Bizouati-Kennedy
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Chips are omnipresent, from cars, phones, computers and even toothbrushes, and the recent shortage shows no sign of ending and is pushing up prices. The situation is so bad, that some experts even call it “chipageddon” or “chipocalypse.”
See: Chipageddon Could Last Until 2023, According to Analysts
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The Wall Street Journal reports that price increases are now affecting suppliers and key materials in chip making as the industry rushes to meet rising demand and plug supply holes. “As a result, many of the world’s large chip makers are raising prices they charge to the brands that make PCs and other gadgets. Industry officials say the increases may continue,” the WSJ reports.
For example, a laptop geared toward videogamers, made by Taiwanese manufacturer ASUSTek Computer Inc., rose from $900 to $950 this month, according to the WSJ, and the cost of a popular HP Inc. Chromebook rose to $250 from $220 at the beginning of June.
In addition, HP has raised consumer PC prices by 8% and printer prices by more than 20% in a year, the WSJ notes, according to Bernstein Research. Prices for computers and other electronics rose at a 2.5% annual rate in May, according to U.S. government data, the biggest increase in over a decade, the WSJ adds.
See: Prices Surge 5% as Inflation Rises with No End in Sight – May’s Consumer Price Index, By the Numbers
Find: How Major Tech Companies Change the Cities They Moved To
Last month, Jim Whitehurst, IBM president, told the BBC that the shortage would last at least a “couple of years.”
“There’s just a big lag between from when a technology is developed and when [a fabrication plant] goes into construction and when chips come out,” Whitehurst told the BBC. “We’re going to have to look at reusing, extending the life of certain types of computing technologies, as well as accelerating investment in these [fabricating plants], to be able to as quickly as possible get more capacity online,” he said.
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