At this point, it’s no secret that the global manufacturing industry is facing a severe chip shortage. Companies in every industry have been forced to modify their operations since they can’t purchase enough chips to run their production lines like usual. Although the biggest impact has arguably been felt in the automotive sector, it appears that the shortage’s impact is spreading.
The disruption couldn’t come at a worse time since manufacturers are working to capture the business of customers that previously bought Huawei devices and those who are upgrading to a 5G-compatible phone.
Manufacturers have been more eager than usual to get their hands on Qualcomm’s silicon in recent months. According to Reuters, the chipmaker is now struggling to meet the increase in demand due to the fact that it itself is facing component shortages.
An anonymous insider associated with Samsung’s supply chain noted that the shortage is currently hitting mid- and low-end smartphone models the hardest. This isn’t exactly surprising. However, it appears that Qualcomm’s high-end Snapdragon 888 chip is teetering on the edge of a shortage as well.
Those familiar with the situation didn’t say whether Samsung’s flagship phone production is currently being affected. Regardless, it will likely be impacted in some way unless Qualcomm is able to quickly shore up its chip shortage.
Moreover, it’s unclear if consumers will have a hard time finding Samsung devices in the near future. While there is almost a guarantee that the company’s sales will be impacted at some point, Samsung could be far enough in its production to stave off the inevitable for a few months.
A multitude of factors is currently influencing the global chip shortage. Obviously, the COVID-19 pandemic is the largest of them. Many companies were forced to temporarily halt their production at this time last year. That caused a chain reaction of delays and setbacks that is still being felt today.
For Qualcomm specifically, part of the problem is Samsung’s new 5nm fabrication process. Since it is still relatively new, the company is having a difficult time optimizing it for mass production. The fact that it was rolled out during the pandemic certainly isn’t helping matters.
It will be interesting to see how Qualcomm and Samsung respond to the current shortage and what type of impact it will have on the consumer device market.