Chip shortages could affect smartphone prices, says Xiaomi president

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The global semiconductor shortage could soon hit the mobile phone market, according to Xiaomi president Wang Xiang.

Speaking during an earnings call, Xiang said that the chip shortage has led to increased costs for the company, which may lead to an increased price for Xiaomi's mobile devices.

"We ill do our best to offer the best price we can to consumers," Xiang commented. "But sometimes we may have to pass part of the cost increase to the consumer in different cases."

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Why is there a global chip shortage?

In later 2020, the stars aligned for a complete semiconductor disaster.

Manufacturers are dealing with an unprecedented demand for semiconductors. This comes after companies in the gaming, automobile and wider technology industry failed to predict the demand for their silicon-based products amid the COVID-19 pandemic.

A multiplicity of issues has made this even more difficult. Logistical problems stemming from the pandemic, scalpers attempting to resell products for a profit, crypto miners and sanctions from the Trump administration against Chinese companies have caused further chip problems.

Xiaomi11
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Xiaomi is set to announce new Mi 11 devices on March 29.

Will this affect other smartphone companies?

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It's likely that Xiaomi will not be the only company to suffer at the hands of chip shortages.

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Samsung has already delayed its next Galaxy Note until 2022, noting the "serious imbalance" in semiconductor supply and demand. This could signal further problems for other smartphone manufacturers, as Samsung itself is a major chip producer.

The impact on Apple is less clear. Foxconn has previously said the semiconductor issues will have a "limited impact" on its Apple manufacturing due to "proper precautionary planning" from the company. However, reports from Nikkei suggest that the chip shortage could impact Samsung's OLED panels used in the iPhone display.

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