Consumer burdens are expected to rise as chipflation spreads. Chipflation refers to a situation in which shortages of memory semiconductors driven by the spread of Artificial Intelligence (AI) push up parts and material prices, which in turn raises the prices of related products. The impact, which first hit finished goods such as electric vehicles (EVs) and smartphones, is now spreading to the after-sales service and repair market.
According to the Information technology industry on the 13th, Samsung Electronics recently raised the cost of repair materials supplied to Samsung Electronics Service Co., Ltd. This is the second increase since January. Material costs for products in the Mobile eXperience Division (MX Division), including smartphones, rose by an average of 5%, while those for products in the Home Appliance Business Division rose by an average of 9%. The increase covered not only chips and panels used in smartphones, but also various components such as motors and compressors used in air conditioners and washing machines.
The higher cost of repair materials is likely to lead to higher after-sales service charges for consumers. That is because materials are believed to account for 80% to 90% of repair costs. Samsung Electronics Service Co., Ltd.'s decision to raise repair material prices was reportedly unavoidable, given rising parts and material costs and similar cost increases by competitors.
Major electronics brands have also raised product prices several times this year. Apple recently increased prices across its Mac and iPad lineup by about 15% to 25%, reflecting higher parts and material costs. Global electronics companies such as Sony, Xiaomi, HP, and Dell have also raised prices on key products. As prices rose not only for memory semiconductors but also for various components used in electronic devices, price adjustments were seen as unavoidable to improve profitability.
The Information technology industry expects chipflation to continue for the time being. That is because supply shortages will be difficult to ease with only Taiwanese companies expanding production of DDR4 SDRAM, while major memory makers continue to cut output. TrendForce, a market research firm, said that given these supply and demand conditions, DRAM prices are likely to keep rising in the third quarter as well.
Kim Se-hyung
This article has been translated by GripLabs Mingo AI.
