Foundry clients of Samsung Electronics Co. can now expect to pay up to 20% more for semiconductor manufacturing for the foreseeable future. Samsung joins many of the chipmaking industry giants in a multi-business price increase to make up for increased material costs and logistical needs. The increase comes following a more conservative year for Samsung, having maintained its pricing policy while the rest of the industry raised prices in response to chip shortages.
Why Are Chipmakers Raising Prices?
Last year saw a shortage of semiconductor chips in the supply chain, a result of COVID-19 pandemic-related manufacturing and shipping pitfalls. The shortage mixed with the high demand for chips across the globe has all but forced the hand of corporations to raise their prices.
How This May Affect the Electronics Parts Market
According to an article by Bloomberg that covers the Samsung price increase, customers and partners seeking solutions are now forced to shift their focus from optimizing profitability (hunting down the best part for the margin) to a more strategic game plan. In other words, material costs and shortages will mean clients expend more resources procuring the chips and become less concerned with the overall cost.
More obviously, the rise of chip prices mixed with the fallout of last year’s shortage means quite simply that devices will be more expensive. That means more expensive parts, affected repair workflows, and potentially unhappy customers at the point of sale and beyond.
What About the Repair Industry?
In Q1 of 2022, Samsung shipped 73.6 million devices, and they expect a total of over 300 million across 2022. Whether dealing with Samsung branded items or Samsung chipped third-party devices, the impacts on the repair industry are unavoidable. Small to mid-sized repair shops will likely see the brunt of the price increases as they hope to seek up-to-date parts to appease customers and keep repairs afloat.
As the aforementioned article suggests, your approach to seeking replacement parts may need an adjustment from most affordable to most accessible.
It May Be Time to Update Your Inventory Management Practices
Our recommendation for repair shop owners is to keep their inventories fresh, maintaining a system that supports their ongoing stock. As device models become dated, profit margins decrease, more so in an age of increased parts prices.
Is Your System Automated?
You’ll want an automated inventory system that integrates with your front-end software. Automated inventories save on employee labor time, help maintain accurate numbers, and enable repair shops to better focus on other profitability and customer retention strategies. How so? By providing trackable SKUs so managers can see what needs reordering.
In other words, when you optimize your inventory management practices, you’re better able to withstand price increases like those of Samsung and Intel.
Electronics Repair POS & Much More from RepairQ Software
From point-of-sale to customer check-in and repair management, RepairQ provides software solutions for repair shops looking to improve their internal and customer-facing processes. Our software is fit to handle a wide range of industry needs, that includes electronics repair shops, cell phone repair centers, appliance repair, and much more.
Get in touch online to learn more.
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