Chip shortage delays product launches

Global Chip Shortage (Source: Shutterstock)

The Consumer Electronics and Appliances Manufacturers Association (CEAMA) said that the domestic appliances and consumer electronics industry expects the shortages of semiconductors & chips to stretch into 2023. It said that several prodcers who rely on these inputs are planning to delay their product launches. This, coupled with rising ferrous products, has also offset the softening of prices happening in the sector. Multiple macroeconomic factors like increase in commodity prices, freight rates and material shortages are affecting the cost of these commodities.

“The industry might run short of controllers owing to shortages of semiconductors and other electronic components. Keeping in mind the surge in demand during festive, we have taken appropriate measures to mitigate the near-term risks,” CEAMA President Kamal Nandi noted. “It is a multifaceted issue with currently no sign of abating. With demand on the rise and supply likely to remain constrained, we expect this shortage to last through 2022 and into 2023,” he added.

In order to deal with this issue, companies are exploring a combination of options such as design optimisation and value innovation, hedging, dual sources and localisation, and advance and joint planning with suppliers. Some of the products where chips are used include: micro controllers, optocoupler, power relay, switch, varistor, and connectors.