Demand for electronics, already accentuated by a pandemic that had all of us relying on internet protocol devices even more, is set to further explode. Recent survey results from equity research company Cowen found 43% of U.S. consumers plan to purchase a new smartphone this year, up from 30% in 2020.
As for connected TV devices, they’re already coming off a record fourth quarter, with shipments increasing by 7.6% to 305.3 million.
Looming over this prosperity is a global shortage in the supply of semiconductors that has already brought the auto industry to its knees and has drawn a 100-day review by the Biden administration.
Hamstrung by a shortage of chips that control everything from in-car entertainment systems to power steering sensors, U.S. automakers General Motors and Ford said in February the semiconductor scarcity could cut into their full-2021 earnings by as much as $2 billion and $2.5 billion, respectively.
Global semiconductor sales totaled $439 billion in 2020, up 5% over 2019, according to the Semiconductor Industry Association. Sales for December alone were up 8.3% to over $39 billion.
Manufacturing hasn’t been able to keep up with demand. Semiconductor companies Intel, Nvidia and Taiwan’s TCSM say the problem could persist past 2022.
The streaming video industry hasn’t reported feeling the impact yet — there wasn’t a single reference to the scarcity of semiconductors in the Q4 earnings reports of Apple, Alphabet, Amazon, Roku or Xperi.
But as these publicly traded companies get ready to queue up their Q1 earnings, the check’s probably in the mail.
Donald McGarva, CEO of U.K.-based pay TV set-top tech company Amino Technologies, said lead times for chipset orders have grown by as much as six months.
“Of course, fluctuations in the chipset market have happened before, and Amino always works hard to mitigate customer impact,” McGarva said in a statement. “This time, we took early management action to secure stock, increase inventory holdings, build buffer stock and forecast additional kitting and assemblies, all to ensure that our supply chain is operating with the best possible lead times.”
The cable and telecom industry weighed in on the issue earlier, as the Biden administration had already convened its review of the cable and telecom industry.
ISPs Want to Be Heard
“We urge you to include broadband providers in measures to address the chip shortage, support initiatives that will expand domestic innovation and investment in semiconductor development and manufacturing facilities for all industries and ensure coordination across government and with industry partners on supply chain matters,” read a joint letter sent from trade groups NCTA-The Internet & Television Association, ACA Connects, CTIA-The Wireless Association and USTelecom.
