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Samsung Warns of Deepening Chip Shortage

Samsung Warns of Deepening Chip Shortage

Samsung, one of the world's largest makers of chips and consumer electronics, has issued another blunt warning to the electronics market amid the global shortage of semiconductor chips.

According to recent reports, Samsung warns of a “serious imbalance” in the semiconductor industry, as shortages continue to cause disruption. The tech giant also hinted that the next Galaxy Note smartphone could be delayed until 2022, in order to streamline production lines.

“There’s a serious imbalance in supply and demand of chips in the IT sector globally,” Samsung’s co-Chief Executive Officer, Koh Dong-jin, said during an annual shareholder meeting in Seoul. “Despite the difficult environment, our business leaders are meeting partners overseas to solve these problems. It’s hard to say the shortage issue has been solved 100%.”

Samsung previously sounded the alarm over the lack of semiconductors back in January, when Vice President Han Jinman warned that the global chip shortage affecting the automotive industry could also impact the smartphone market.

Other industry giants, including Continental and Renesas, have warned of longer than expected deficits, thanks to the pandemic-driven demand for everything from cars to game consoles and mobile devices.

The automotive industry has been warning about the chip shortage for some time. Earlier this month, General motors announced that it would cut production further at three North American plants, adding a fourth to the list of affected plants. Shortages have led to some car manufacturers building their vehicles without computers, while others, including car group Stellantis (formed by the merger of Fiat Chrysler and Groupe PSA), conceded that the problem could linger far into 2021.

Some analysts believe that shortages could largely be resolved in the coming months. However, there is concern that tight supply in some segments, such as in more mature semiconductors where capacity building takes time, will inevitably stifle the broader consumer electronics industry and push up prices if it continues. From Washington to Brussels, semiconductors are now at the forefront of official agendas.


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