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Smartphone prices will go up in second half of 2021

Due to the global shortage of chipsets, smartphone prices may increase on the second of this year.
realme and Redmi

A price hike in the second half of the year?

Multiple manufacturers have recently been affected by a chip shortage. The latter represented a wide range of industries, beginning with the car industry, progressing to computers, cellphones, and consoles. To cope up with the shortage, many of them have had to minimize production.

Prices used to go up and down when product supply and demand were out of control. Even the graphics card has its cost tripled as a result of chip shortages. In addition, the price of processors, memory, and SSD's has risen up significantly.

It was also announced recently that TSMC, the world's biggest semiconductor maker, will increase the manufacturing price of 12-inch wafers. Starting April, the price of each piece will go up by around USD 400, a 25 percent increase, and it will be changed quarterly.

Other chipmakers are also raising their product's prices.

The reason?

Major factories across the globe have felt the effects of the pandemic. Most of them had shut down their operations or reduced their production capability. It is coupled with an increase in demand due to major changes on the "new normal" where classes and work are being done at home online. The need for electronic gadgets from PC, laptops, tablets, and even smartphones has contributed greatly to the crisis of chipset supply.

It is said that the global shipment of laptops in 2020 has surpassed 200 million units for the first time. As a result, there was a shipping shortage. Furthermore, as previously mentioned, several chip manufacturers had reduced production.

When we look at the prices of smartphones released in the first quarter of 2021, we can see that they are still fairly consistent. Some companies, such as OnePlus and realme have also released ultra-low-cost devices.

However, the crisis of chip scarcity has not been resolved. As a result, it is easy to predict that the manufacturers would have to raise the prices of their products. Many Chinese first-tier phone producers have already issued their warnings.

According to Xu Qi, president of realme China, smartphone prices may fluctuate in the second of this year due to a shortage of components.

Prior to this, Xiaomi also warned of a price hike on their products due to several reasons such as a pandemic, sanctions to key China-owned companies, and lack of foresight in demand.

It is said that the top companies will implement price changes in June of this year. As a result, the majority of devices that will be coming in the next months would be more expensive than equivalent models released a year ago.

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