Will chipset crunch pose huge setback to Samsung’s business in coming quarter?

The South Korean global electronics maker Samsung has proclaimed that there is a severe shortage of chipsets in the world for which it is also struggling to manufacture devices. Samsung is also one of the world’s largest manufacturers of chipsets and has been facing this problem since the pandemic.

At the annual shareholders meeting in Seoul, Koh Dong-jin, co-chief executive officer of Samsung, said that this severe shortage of chips would pose a bigger problem for its business in the coming quarter. The company also hinted that its best selling Galaxy Note might not be launched this year, although they are working towards streamlining its lineup.

Global chipmakers such as Continental AG to Renesas Electronics Corp. and Innolux Corp have already warned of this deficit several times back due to the pandemic, but the demand for smartphones, cars, and gaming consoles is increasing every month. Due to this shortage of processors, Volkswagen AG said that they failed to produce 100,000 cars globally.

In an interaction with Bloomberg, Koh said, “There’s a serious imbalance in supply and demand of chips in the IT sector globally. Despite the difficult environment, our business leaders are meeting partners overseas to solve these problems. It’s hard to say the shortage issue has been solved 100%.”

Samsung further said that in order to counter the deficiency, it is working closely with its global partners that can save it from business setbacks also. MS Hwang, analyst at Samsung Securities said, “The tightened supply of Qualcomm AP chips produced by TSMC is affecting everybody except Apple. PCs will soon be hit due to the short supply of display driver ICs, and the profitability of TV will be affected by soaring LCD panel prices.”

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