Back in 2020, the global electronic market faced a sudden and prolonged shortage of key chips and semiconductors. With COVID-19 forcing much of the world into lockdown, it became impossible for manufacturers in Asia to meet their usual quotas.
Demand for essential components remained high across much of the world, outstripping supply by a significant margin. Within just a few months, some of the most important components used in the manufacture of computers, cars, DJ equipment and more became almost impossible to get hold of.
Remained stockpiles were wiped out and manufacturing processes in many regions came to a halt.
Additional factors like the ongoing trade war between the USA and China did little to help matters. Nor did the lingering effects of Brexit, which to date has done nothing to ease UK imports and exports.
Initially, it was predicted that the situation would improve gradually throughout 2021. In reality, things only worsened throughout the entire year, culminating in a disastrous fire that pretty much destroyed a major Japanese factory where most Pioneer and Denon DJ chips are produced.
This means that for the foreseeable future at least, things are not looking great for the DJ hardware industry, or any major player in the global technology sector.
Higher Prices or Lack of Availability
Looking ahead, most analysts are predicting fairly turbulent times for much of the year, though with at least some respite to come during the closing quarter. The latest figures from Deloitte indicate that waiting times for essential chips and components are currently somewhere between 10 and 20 weeks.
While major shortages remain, it should only be a matter of time until manufacturers catch up and are able to meet demand once again.
“For the tech sector, smartphones and gaming consoles will continue to be affected,” said GlobalData’s Thematic Research analyst Daniel Clarke.
“Consumers will be impacted by rising prices or a general lack of widespread availability. This is because tech companies will either decide to absorb the cost internally or pass the cost onto the consumers.”
In the meantime, it remains to be seen whether the issue drives further price increases, a major lack of available inventory or a combination of the two. Some manufacturers and retailers will inevitably pass the higher costs on to customers, though some may absorb them internally in hopes of recouping lost revenues later.
Though of course, any potential light at the end of the tunnel could be extinguished by the escalating situation in Ukraine. It remains to be seen how China in particular responds to the crisis, but indications suggest that the conflict could place further tensions on US-China relations.
0
