In 2021, Samsung could significantly reduce the production of smartphones.
Qualcomm, which is one of the leaders in the semiconductor market, cannot supply Samsung with the required number of processors. Two sources at the U.S. company told the agency on condition of anonymity. Demand for Qualcomm chips has surged in recent months and the company can not provide partners with the necessary number of processors due to a lack of components for their production.
In particular, the insider said there is a shortage of its flagship processor, the Snapdragon 888. Another company interlocutor predicted that due to a shortage of chips in general, Samsung will have problems with the production of smartphones in low and medium price segments. A representative of Samsung, which was contacted by reporters, declined to comment. Qualcomm said the company intends to address supply issues in the future.
“Demand still largely exceeds supply,” Qualcomm CEO Cristiano Amon said during its annual shareholder meeting last Wednesday. According to analysts interviewed by Reuters, the microprocessor shortage is driving up the cost of even the cheapest chips. For example, a microcontroller chip from STMicroelectronics, originally priced at two dollars, now sells for $14 apiece.
The Korean corporation is also experiencing problems due to force majeure circumstances. For example, producing radio-frequency transceivers, Samsung’s plant in Texas was forced to stop work in February due to power shortages caused by winter storms.
At the same time, experts pointed out that medium and small businesses, rather than multinationals like Samsung, are the hardest hit by market shortages. For example, Qualcomm is primarily interested in providing its largest partners. The company’s priority product is the flagship Snapdragon 888 processor, used in the most expensive Android smartphones.
In early March, Xiaomi CEO Lu Weibing said there was a severe shortage of microchips. According to him, the shortage of processors on the market hinders the production of gadgets. At the end of February, a global shortage of products based on certain processors was predicted by analysts Bloomberg.