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Shortage Of Semiconductors In 2021 Means Higher Prices For Consumers

by Serena Martinez / Jun 25, 2021 06:05 AM EDT
Nintendo Switch

A recent report revealed that as the global chip shortage continues this year, it's expected that consumers will experience high prices on gadgets, PC parts, and automobiles. A gaming laptop which is usually priced at $900 on Amazon is now priced at $930. Even HP Chromebooks are not excluded in this increase as they rose to $250 from their usual retail price of $220.

An interview with an industry leader and researcher confirmed that the world is currently experiencing a shortage of semiconductor chips. These are essential parts for creating current electronic devices such as game consoles, flat-screen TVs, and cars. An average car needs one hundred semiconductor chips to function properly. These companies do not make these chips on their companies; they reach out to other manufacturers in order to purchase this raw material.

The tech world is still in a complicated stage at the moment due to the lack of semiconductor chips, cutting production short. This shortage has caused hundreds to thousands of vehicles to halt production until the situation normalizes.

In the case of game consoles, there has been an increase in demand, such as the Nintendo Switch, Nintendo Switch Lite, PlayStation 4, PlayStation 5, and Xbox. Since these consoles require the use of semiconductor chips, there is a chance that stocks for it will be low, and the reselling prices may skyrocket.

With COVID-19 vaccines now being deployed in all parts of the world, there could be some slow chances of recovery for the industry as well. However, the possible timeline for this global chip crisis to normalize might take some time. 

In the case of the producers of semiconductors, they are denying that they are taking advantage of the demand and the situation of the COVID-19 pandemic that they lessening the volume of production and increase their prices. "We're not taking advantage of this cycle to do anything on pricing, other than where we are paying more for the additional supply that we've got to get on board. We're passing that on," said Vincent Roche, the CEO of chipmaker Analog Devices Inc.

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