The global chip shortage could dampen Christmas
A gamer plays on Sony’s Playstation 5 console at his home in Seoul.
Yelim Lee | AFP via Getty Images
The global chip shortage has been rumbling on all year and still hasn’t gone away.
But what does that mean for Christmas? Will some presents be harder to get hold of or more expensive?
That depends on what you’re after and how late you leave your Christmas shopping.
Semiconductors are beneath the hood of an increasing number of products — from cars and e-bikes to washing machines and toothbrushes. Many of these chips are in short supply as the Covid pandemic has led to supply chain bottlenecks and increased demand.
Alan Priestley, a semiconductor analyst at research firm Gartner, told CNBC that the chip shortage is bound to have some impact on Christmas.
“We may find that some things that have been readily available in the past may not be readily available now,” he said, adding that instant gratification can no longer be found from the usual shopping services. “We’re all used to Amazon Prime: hit the button, it’s there in 24 hours. Maybe now you’ve got to wait two or three weeks.”
Many of today’s electronic products contain a large number of chips.
“The issue we face is things made with chips don’t just use one chip,” Priestley said. “New smartphones have got many, many power control chips and it’s those chips that are in short supply.”
TSMC, Samsung and Intel, the heavyweights of the semiconductor industry, aren’t focused on making these older, less advanced power management chips because they can make more by selling more innovative versions.
Semiconductor-rich products like computers, smartphones and games consoles are likely to be popular Christmas presents, but there are availability problems, according to Glenn O’Donnell, VP and research director at analyst firm Forrester.
Sony’s PS5 and Microsoft’s Xbox Series S are widely unavailable, for example, as is Google’s Pixel 6 Pro smartphone.
“If you can get them, you’re paying a high premium,” O’Donnell told CNBC.
“I believe the supply issues including but not limited to semiconductors will cause a lot of trouble this season,” he added. “If you don’t already have what you want to put under the tree, you may be out of luck. Even Santa himself won’t be able to deliver.”
Berlin-based Jack de Santis, CEO of repair service Rebel Technology Labs, told CNBC that he’s looked “everywhere” for a Google Pixel 6 Pro — but to no avail. He’s unsure if he will stick with his old phone or get the regular Pixel 6, which is still available in a few places. “Both options are compromises I’m not happy with,” he said.
Battling the bots
It’s not just other shoppers that consumers are competing with for in demand items this Christmas. Some people are using automated bots to snap up popular items as soon as they become available online at face value.
“The bots buy up high-demand products to corner the market so they can then sell these at inflated prices,” O’Donnell said.
There are countless examples of PS5s and Xbox Series S consoles being sold on eBay, Facebook Marketplace, Gumtree and other buy-and-sell platforms for considerably more than the recommended retail price.
Don’t hesitate and be flexible
Shoppers should consider buying desired electronics that are in stock and available sooner rather than later, Priestley warned.
“If it’s there and available, make the purchase,” he said. “The issue is the supply lines are extended. As the goods that are in current supply get consumed, it’s going to take longer to replace them.”
Consumers who are able to be flexible with certain purchases may also have more luck. PCs, for example, come in lots of different configurations and the central processing unit (CPU) is often changeable.
“It may well be that the your desired configuration is not available, but a different configuration is available,” Priestley said. “Consider alternatives.”