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Phones and consoles could get pricier as chip crisis bites

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AFP – Prices of popular gadgets such as PlayStations and iPhones could rise because of microchip shortages caused by a “perfect storm” of Coronavirus-driven demand, supply chain disruptions and trade war stockpiling, experts warn.

In the months after the pandemic hit, people stuck at home went on a spending spree to buy items including extra monitors, new computers and tablets – each of which runs on all-important chips.

Compounding the crisis are US-China tensions – Huawei stockpiled semiconductors last year before American sanctions aimed at cutting the tech giant off from global chipmakers kicked in, adding further pressure to supplies.

The squeeze in the market was highlighted when automakers, enjoying a pick-up in car-buying, tried to source specialised semiconductors, only to find manufacturers had prioritised consumer electronics and could not fill orders.

The auto sector is the highest-profile victim so far, with giants including Ford and Volkswagen forced to cut production, but shortages appear to be spreading to a wide range of electronic items.

“A perfect storm of coronavirus chaos, trade-war stockpiling, and a paradigm shift in work-from-home devices is causing the chip squeeze,” Neil Mawston, executive director at consultancy Strategy Analytics, said.

“Anything with a chip is affected – cars, smartphones, games consoles, tablets and laptops. Electronic gadgets and cars will be in shorter supply or more expensive throughout 2021.”

Sales of certain iPhone models have reportedly been limited because particular components were not available, while some have pointed to chip shortages for problems in getting hold of Sony’s new PlayStation 5 and Microsoft’s latest Xbox.

A growing number of major chipmakers have voiced concern at the brewing crisis, including US firm Qualcomm, the world’s biggest mobile chipmaker, and rival AMD, both of which supply to major consumer electronics companies.

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