Chip Shortage: Samsung Warns Of ‘serious Imbalance’

Samsung, the world’s biggest computer-chip manufacturer, has warned of a “serious imbalance” within the semiconductor industry, as global shortages cause disruption.

It also said it’d skip the launch of subsequent Galaxy Note smartphone, to streamline its lineup.

There are growing fears market shortages could slow economic recovery after coronavirus.

EU, US, and Chinese governments are seeking to spice up production.

“There’s a significant imbalance in supply and demand of chips within the IT sector globally,” Samsung’s co-chief executive and mobile chief, Koh Dong-jin, said at a shareholder meeting.

“It is tough to mention the shortage issue has been solved 100%.”

Samsung was working with overseas partners to satisfy demand, he added.

Samsung’s release of a replacement Galaxy Note smartphone may now be delayed until 2022, Mr. Koh signaled.

As a high-end model, “it might be difficult to release”, he said.

Another popular model, the Samsung Galaxy S21, was launched in January.

“It might be a burden to unveil two flagship models during a year,” Mr. Koh added.

Quilter Cheviot research analyst Ben Barringer said: “Growing trade tensions between the US and China put the semiconductor industry in uncertainty, even before the pandemic.

“This shortage illustrates how important certain countries became in terms of supply chain – and the way important access to semiconductors is.”

And last month’s closure of its chip-fabrication plant by adverse weather in Texas had exacerbated Samsung’s problems.

Taiwanese research firm TrendForce estimated the shutdown could reduce global smartphone production by 5% within the second quarter of this year.

“They try to differentiate between absolute demands and nice-to-haves,” Mr. Barringer added.

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