Foxconn foresees chip shortages until mid-2022 -- ASUS jacks up prices

Posted on Friday, Apr 02 2021 @ 10:59 CEST by Thomas De Maesschalck
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It's not a pleasant topic to write about but the current chip shortages will likely last a lot longer than what was previously written. Earlier this year, some manufacturers told the press and analysts that the situation might stabilize again towards the second half of this year, but now Foxconn tells something different.

Foxconn foresees chip shortages until mid-2022

Foxconn is one of the world's largest manufacturers of electronics devices. While not well-known among the general public, Foxconn is the go-to partner for a lot of tech firms for the production of electronics. Big clients include Apple, Nintendo, Sony, Microsoft, etc. Without knowing it, your house is probably filled with products made by Foxconn workers.

In a recent interview, Foxconn executive Young Liu revealed the company did not suffer from chip shortages until last month. Foxconn is now feeling the brunt though and had to cut its deliveries by 10 percent.

Liu doesn't paint a rosy picture. He says chip shortages are expected to last until the middle of 2022. Furthermore, he believes the situation will get worse between now and then.
Liu added that the chip shortage has particularly affect 'home economy products' of late, albeit because of increased demand rather than additional supply constraints. By contrast, the shortage has had only a limited impact on orders that were locked in 'a long time ago'.

Arm Taiwan expects easing in first half of 2022

Arm Taiwan president CK Tseng on the other hand believes shortages may start easing as early as the first half of 2022. It's a little more optimistic than Foxconn's prediction -- but still a dire situation of course.

ASUS increasing GPU prices again

The bad news doesn't stop as Tom's Hardware reports ASUS is once again increasing the prices of its video cards. Earlier this year, ASUS had increased video card prices to reflect the increased costs related to tariffs. Now ASUS is preparing a second price hike due to higher component prices.
Asus is reportedly looking to increase its graphics card prices once again, partly because it has to pay extra to source components and partly because demand is so high. Whether or not its industry peers follow their bigger rival remains to be seen, but in a world where companies cannot get chips, they need to increase prices to keep production running.
Citing a report from DigiTimes, the site writes GPUs will face supply constraints through the end of 2021. Both AMD and NVIDIA are limited by foundry capacity -- which is currently 100% booked.

SK Hynix gets approval for $106 billion long-term expansion

SK Hynix is world's second-largest memory maker and the company is preparing a massive expansion of its production capacity. ComputerBase writes SK Hynix secured regulatory approval for a new mega factory in Yongin, South Korea. Plans for this 120 trillion South Korean won (about $106 billion) expansion were first revealed in 2019.

It's a massive plan but it's spread over the course of ten years. Initial construction of the 4.5 million square meters mega fab is expected to start in 2022. SK Hynix will build four production facilities at the site -- which will be capable of making 800,000 wafers a month. Production will focus on DRAM and next-gen memory technology.

Yesterday, TSMC announced it would invest $100 billion in production capacity by 2024.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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