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Ongoing chip shortage to create serious imbalance, forewarns Samsung

Ongoing chip shortage to create serious imbalance, forewarns Samsung

South Korean multinational conglomerate, Samsung, has reportedly warned of a “serious imbalance” in the semiconductor market, owing to a disruption caused by chip shortages at the global level. The company has also stated that it might skip the roll-out of its next Galaxy Note smartphone with an intention of streamlining its lineup.

While raising fears of market shortages could slow down economic recovery following the coronavirus, it is to be noted that the shortages began in 2020, as the industry was hit by the COVID-19 pandemic.

A decline in sales had caused car manufacturers to bring down their orders from the Chinese facilities that produced computer chips. In response, the supply of chips from factories was transferred to other sectors that witnessed high demands. In such a scenario, companies including Honda, Volkswagen, General Motors, and Toyota were not able to retrieve the cancelled orders when the demand increased and had to reduce the production.

Expressing his opinion over the semiconductor shortages, Koh Dong-jin, the Co-Chief Executive and Mobile Chief of Samsung, stated that there is a serious imbalance in the demand and supply of chips in the IT sector at the global level and it is difficult to say that the issue of shortage has been completely resolved. Samsung is collaborating with overseas partners for meeting the demand.

Koh further stated that the release of Samsung’s new Galaxy Note smartphone might experience a delay until 2022 and it might be difficult to proceed with the release as it is a high-end model. Koh also added that another popular model, the Samsung Galaxy S21, was rolled out in January 2021 and it could be a burden to release two flagship models in a year.

The pandemic has led to a boom in technology sales, fueled by people staying and working from home, which has disrupted other sectors. In fact, the industry had witnessed a scarcity in graphics cards, the latest models of PlayStation and Xbox consoles are being sold out every time upon the announcement of a new stock, and Apple had to stagger some iPhone launches as well.

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.