Chipflation Impact: What It Means for Consumers and Companies
MUMBAI: The ongoing AI boom is set to impact consumer electronics significantly, with rising prices for a range of products due to a shortage of memory chips. Devices such as smartphones, smart TVs, and kitchen appliances are becoming “smarter,” requiring more memory to function effectively. As a result, consumers can expect to pay more for these everyday items.
The price of memory components has surged, with eMMC prices increasing nearly 12 times and DDR memory prices rising by almost 15 times. Arjun Bajaj, director at Videotex, noted that smart TV prices have already climbed by nearly 30% in recent months. If these price pressures persist, further increases may be unavoidable.
The current chip shortage is largely attributed to semiconductor manufacturers reallocating resources to high-bandwidth memory (HBM) for AI applications. This shift has caused a spike in prices for standard DRAM, NAND, and legacy microcontrollers. Nikhil Rajpal, CEO of smart devices firm Qubo, stated that brands are racing to secure chips, while smaller smartphone and PC manufacturers are struggling to procure necessary components. Counterpoint Research analyst Parv Sharma indicated that demand for lower and medium-end smartphones and PCs may decline, projecting global smartphone shipments to fall to around 1.1 billion units, the lowest since 2013.
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