Smartphone launches will be postponed by 20% in 2022, due to a shortage of chips. There is not enough production capacity for the new 7nm chip fabrication process. With the announcement, Apple, Samsung, Sony, HTC, Huawei, and Asus are all likely to postpone their upcoming phones.
Why are chip shortages happening?
Chip shortages are not new, but they seem to be more frequent than in the past. One of the main reasons for this is that there are just not enough manufacturers making the chips that are needed. Manufacturers have long lead times because they need to come up with an idea for a chip and then design it before they can start production. The backorders for these parts are lengthening due to demand, which means it will take a long time to get the supply back to normal levels.
What are the consequences of this smartphone shortage?
The smartphone shortage has far-reaching consequences. The manufacturing of the latest technology is much more complicated than it used to be, and because of this, many companies are short on the resources they need to make smartphones like they usually do. Some companies are looking at delaying or canceling their next line of smartphones altogether, while others are looking at smaller supply quotas.
Are all major vendors involved in the shortage?
Most major smartphone vendors are affected by the shortage. However, Apple is less impacted because they use a different type of chip that is not in shortage. Android devices typically use a Qualcomm Snapdragon chipset which is experiencing a tight supply due to a recent fire at a factory that makes the components. This fire has destroyed tens of millions of dollars’ worth of equipment and delayed production by months.
Who is suffering worse from this chip shortage to smartphones?
No one knows the answer to this question for certain, but Huawei seems to be taking a significant hit. The company has delayed the release of its flagship Honor 10 smartphone a few times and is expected to release its P20 lineup in April. However, Samsung’s S9 and iPhone X both got off without a hitch by releasing their models in March.
What’s being done about this smartphone shortage?
The shortage is mainly caused by the discontinuation of the line of chips from a Japanese company. The major smartphone vendors are now postponing their launches in order to avoid any potential issues that might happen as a result. While the demand for smartphones is still high, this move will help keep up with supply and won’t create a huge backlog for customers.
The material used for making some of the chips are getting scarce and this caused a spike in prices. The supply will not be back to normal until mid-2020. To make sure that they don’t run out of stock, smartphone vendors like Samsung and Apple postponed their launches.