Supply Chain Constraints: High-End Laptops Facing a Shortage of Chipsets and Key Components

Russia and Ukraine export essential raw materials for the manufacture of semiconductors such as neon gas, the chemical C4F6 and the metals palladium, nickel, platinum, rhodium and titanium.

Due to severe supply chain constraints, including the scarcity of chipsets and other key components, high-end laptop buyers face a nearly five-month waiting period. Apple’s Macbook and Macbook Pro models, followed by high-end models from Dell, HP, and Lenovo, have the longest wait times.

According to trade analysts, supply constraints are not expected to ease for at least four to five months, and if the Ukraine-Russia war continues for a long time, the situation is likely to worsen with regard to the supply of semiconductors.

Russia and Ukraine export essential raw materials for the manufacture of semiconductors such as neon gas, the chemical C4F6 and the metals palladium, nickel, platinum, rhodium and titanium.

In India, the high-end personal computer (PC) segment, which costs more than Rs 60,000, has a 7% market share. Around 14 million PCs (laptops and desktops) were sold in India in 2021.

There is a shortage of chipsets and other key components like power management ICs and displays. There are also issues related to shipping and logistics. As Apple does not manufacture laptops in India, it must import most devices from China, where supply chains have been disrupted for the past two months due to the spread of Covid-19 variants. Many factories in China remained closed in February due to Covid-19, which impacted the supply of components and other electronic items.

Dell and HP, which make PCs in India, have managed to ramp up production of most devices, but the supply of high-end devices is suffering due to a shortage of components.

According to Counterpoint Research, the situation should calm down after four to five months in the premium PC category.

Regarding smartphones, shipments for the January-March period are expected to decline due to the impact of Omicron and supply chain constraints. According to Counterpoint, although India saw its highest ever smartphone shipments in 2021 at 169 million units, the October-December quarter saw a decline due to supply issues plaguing India. smartphone manufacturing ecosystem.

Tarun Pathak, research director at Counterpoint, said that following the spread of Omicron and other variants in China in January-February, smartphone shipments are expected to decline in the first quarter of 2022. Demand has exceeded l supply in the last two quarters of 2021, and companies are facing cost pressure due to increased shipping and logistics costs.

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