First it was the auto industry. The smartphone market could be next to face a shortage of semiconductors. That would mean an increase in the prices of smartphones and other electronic items that use semiconductor chips.

The automotive sector saw a massive slump forcing some to shut production of cars because of the shortage. The industry had blamed the crisis on semiconductor companies diverting chips to other sectors during the pandemic. According to industry experts, the chips were diverted to to laptops, phones, gaming systems, and others.

But the auto sector is now recovering, with supply chains from China and Taiwan being restored. But the smartphone and other electronic industry could be at the receiving end of the shortfall.

For instance, Samsung, the world’s largest smartphone maker, saw a chip shortage leading to 20% decline in its sales. Even Intel suspects that the need could last at least two years. [https://www.gizchina.com/2021/07/19/the-global-chip-shortage-has-reached-smartphone-manufacturers/] “While I expect shortages to bottom out in the second half [of the year], it will take another one to two years before the industry is able to completely catch up with demand,” CEO Patrick Gelsinger told analysts regarding the semiconductors shortage recently. [https://edition.cnn.com/2021/04/29/business/chip-shortages-smartphones-consumer-goods/index.html]

As the prices of chipsets and memory go up due to shortage, the smartphone makers will likely increase the costs of handsets. But with the demand for handsets and laptops seeing robust growth after the slump last year, the price rise, analysts say, will not decrease the demand.

What has worsened the crisis is that the chip production is done by a handful of companies in countries like Taiwan and China. The U.S. has pledged to make enormous investments in the production of chipsets. But that is for the long-term.

Read more;

News report on chip shortage:
https://www.zdnet.com/article/the-next-problem-for-the-smartphone-industry-the-global-chip-shortage/

The stock market outlook:
https://www.forbes.com/sites/greatspeculations/2021/07/20/with-auto-chip-shortage-easing-are-semiconductor-equipment-stocks-still-a-buy/?sh=2e86f22777c2

The rise and rise of smartphone market:
https://www.zdnet.com/article/the-next-problem-for-the-smartphone-industry-the-global-chip-shortage/