Samsung warns of serious chip breakage globally

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Samsung Electronics has warned that it is battling the effects of a “serious imbalance” in semiconductors worldwide, becoming the world’s largest technology giant, which has expressed concern about the shortage of chips spreading beyond the automation industry.

Samsung, one of the world’s largest chip and consumer electronics makers, expects chip shortages to pose a problem for its business in the next quarter, co-CEO Ko Dong Jin said at an annual shareholders’ meeting in Seoul. The company is also considering skipping a new Note – one of its best-selling models – this year, although Koh said it aims to streamline its lineup.

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In recent weeks, industry giants from Continental AG to Renesas Electronics and Innolux have warned of longer-than-expected deficits thanks to unprecedented COVID-era search for everything from cars to game consoles and mobile devices. Samsung, the world’s largest smartphone maker, is working with foreign partners to resolve the imbalance and prevent potential business failures, the CEO said.

“There is a serious imbalance in the supply and demand of chips in the IT sector worldwide,” said Koch, who heads the company’s IT and mobile services divisions. “Despite the difficult environment, our business leaders meet with partners abroad to solve these problems. It is difficult to say that the problem of shortages has been solved 100 percent. “

Samsung shares were largely unchanged in Seoul. Chip manufacturers like Samsung and Taiwan Semiconductor Manufacturing Co. are at the forefront of global efforts to address the shortage of chip supplies, the building blocks of multiple consumer gadgets. The deficit has closed car plants around the world and now threatens the supply of other products.

Carmakers were hit first in part by poor inventory planning and are expected to miss $ 61 billion (approximately $ 4,422,740) in sales this year alone. Honda Motor said Wednesday that it will temporarily suspend production next week at most plants in the United States and Canada, highlighting the deepening crisis.

Some analysts say the shortfall could be fixed, especially in the coming months. But the concern is that limited supply in certain segments – such as more mature semiconductors, where time is needed to build capacity – could eventually limit wider consumer electronics and raise prices if it continues. Semiconductors are now at the top of official programs from Washington to Brussels.

On Tuesday, Hon Hai Precision Industry – assembler of most of the world iPhone models – joined a chorus of industry leaders, emphasizing that it will take time to resolve the imbalance in supply and demand.

“We see a shortage, we feel it. But the impact is not so great for most of our customers, “Hon Hai Young Liu chairman told reporters in Taipei. “For certain customers who have orders better than expected, then there is some impact. For large customers who plan well, where there is no big jump in orders, these customers are doing well. “

Koch said Samsung may choose not to introduce it Galaxy laptop in the second half of 2021, interrupting a series of annual launches on the market line.

“The Note series is positioned as a high-end model in our business portfolio,” he said. “It may be a burden to introduce two flagship models in one year, so it can be difficult to launch a Note model in 2H. The launch time of the Note model can be changed, but we are aiming to launch the Note model next year. “

– With the assistance of Debbie Wu and Vlad Savov.

© 2021 Bloomberg LP

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