CE Prices Set To Rise, As Brands Forced To Place Orders 12 Months Out
Consumer electronic prices are set to rise in Australia, with notebook and monitor sales along with TV and audio products tipped to climb by over 10% due to a sudden rise in component costs.
Analysts claim also affecting the market is a chronic shortage of processors.
Brands are being forced to place orders 12 months out for the Australian market.
Yesterday it was announced that notebook battery module makers are set to lift prices between 10-15% to reflect rising raw materials costs, according to industry sources.
Advantech, the world’s largest maker of computers said its revenues would be held back by a shortage of components.
Advantech Chairman K.C. Liu told an investors conference on this week in Taiwan that intensifying component and chips shortage will drag down its growth momentum in the June quarter, Advantech said.
“It’s a bit like everyone is crazily buying and hoarding toilet papers in a crisis. Everyone is fighting for resources at the same time, and I don’t see a turning point coming yet,” Liu said.
Advantech is the latest company to complain of the impact of a global chip and component shortage that has also hit swaths of the car industry and consumer electronics makers, blamed on a swift economic rebound that has led to surprisingly strong demand.
Advantech said it has mobilized hundreds of people across its 50 business departments to try to mitigate the worsening component and chip constraints.
Another issue facing Australian suppliers and CE retailers as well as the audio industry is that lead times are blowing out with suppliers now having to place orders in some cases 12 months out for the Australian market.
Some lead times have gone beyond 50 weeks for components including audio codec chips, which decode audio signals, and microcontroller chips, the company said.
Lead times are longer than 20 weeks for graphic cards, power management chips, Wi-Fi, Bluetooth, and liquid crystal diode displays, while central processing units and memory chips have a waiting time of more than 12 weeks, according to Advantech.
As carmakers, PC makers and smartphone companies rush to buy components and chips, other buyers are being squeezed. Acer’s chairman and CEO has also warned that the chip shortage is worsening and could stifle PC makers’ growing momentum.
Some clients whose computers will be used in production lines have even asked Advantech to ship products without audio codec chips, as the clients said they could put up with computers without sound during such a serious shortage, Chang said.
“For some clients, whose computers are used in critical medical equipment, it’s very challenging because every component needs a very long period of time to undergo qualification works,” the executive said.
Advantech has also started discussions to increase its prices by 5% from April to reflect the supply crunch and to deter customers from overbooking. The company said it was difficult to tell which customers were accelerating their orders to secure their resources and which were overbooking.
“We’ve started to tell our sales in the front line to be more cautious and not to accept every order,” Liu, the chairman, said.