Chip Scarcity, Cellphone Prices Predicted To Rise

Chipset illustration (doc. Qualcomm)

JAKARTA - In the near future, the price of cellphones is predicted to rise. The reason is that the world's supply of chips has started to decrease and is getting scarcer.

This information was disclosed by the boss of the famous Xiaomi cellphone company, Wang Xiang. According to Wang, the price of mobile phones is likely to increase even if vendors have tried to reduce production costs.

"To be honest we will do our best to offer the best price that we can give to consumers. But sometimes, we may have to pass some of the increase in costs to consumers in different cases, "Wang told Reuters. Monday, March 29th.

Previously, some observers had predicted a reduction in global chips and this would happen at the end of 2020. They predicted that the problem would have an impact on the occurrence of 'chipageddon', the term observers called the chip apocalypse.

This problem started during the COVID-19 epidemic. At that time, various factories in China were forced to close due to the implementation of lockdown regulations. During this pandemic, many people have to lock themselves up at home and they need electronic devices for their daily needs.

This is claimed to be a factor in the depletion of chips in manufacturers' warehouses. On the other hand, many companies stock up on chips for their own devices. Chip supply is decreasing even though market demand is very high.

Then, the policies issued by Donald Trump when he served as US president also affected the world's supply of chips by prohibiting US technology companies from cooperating with Chinese technology giants. As a result, the chip company from China, SMIC, has difficulty producing chips to meet market demands.

Not only is SMIC having a hard time, world-renowned chip manufacturers like Qualcomm are also experiencing the same thing. Qualcomm said that it is trying hard to meet the chip needs of their various smartphones in the world.

"We felt pressure, but we looked fine," said Xiaomi boss Wang Xiang.

Even though the global supply of chips is decreasing, Xiaomi's revenue has actually increased during this pandemic. This was made possible by the year-on-year earnings report of 24 percent in the fourth quarter with a revenue of 70.5 billion yuan.