Surging prices of memory chips could undercut Taiwan’s shipments of notebook computers and smartphones next year, as the chips drive up retail prices of hardware, TrendForce Corp (集邦科技) said yesterday.
The Taipei-based market researcher forecast that notebook computer and smartphone shipments would grow 0.1 percent and 1.7 percent year-on-year respectively next year, down from its previous estimates of 2 percent and 2.4 percent, it said in a report.
If memory supply constraints worsen, or retail price increases surpass consumers’ expectations, TrendForce said it might further cut its shipment growth estimates.
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DRAM prices this quarter are expected to soar 75 percent year-on-year, it said.
This year as a whole, expensive DRAM would likely push up smartphone manufacturing costs by about 8 to 10 percent, given that DRAM makes up 10 to 15 percent of the overall material costs, it added.
As DRAM and NAND flash memory prices continue to rise, the material costs are expected to climb another 5 to 7 percent next year, TrendForce said.
Against this backdrop, mobile phone vendors are expected to raise retail prices across-the-board to maintain profitability, while reducing exposure to the entry-level segment that delivers slim margins, the researcher said.
The persistent chip crunch could hit smaller smartphone vendors especially hard, it added.
Notebook computer vendors would face similar challenges next year, TrendForce said.
The retail prices of notebook computers are forecast to rise about 5 percent to 15 percent next year due to rising material costs, it said.
Hikes in retail prices would weigh on market demand substantially as users extend replacement cycles, it added.
To mitigate the negative effect on sales and profit margins, PC vendors must strike a balance between retail price increases, inventory management and subsidies for distributors, TrendForce said.
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