XMG announced in a press conference that forthcoming laptops based on Intel, AMD, and NVIDIA CPUs are facing significant delays due to supply chain and pricing pressure. China has implemented partial lockdowns in response to fresh outbreaks of the Omicron type of the Coronavirus.
This could push back the release of laptops featuring Intel’s 12th Generation Core processors and NVIDIA’s Ti graphics cards, announced at the start of the year. In the country’s east, Suzhou has already closed the first industries. Bottlenecks in the supply chain and logistics and a lack of specific chip types and price hikes are all on the horizon.
Supply chains and prices under pressure: new laptop launches threatened with further delay
- China is reacting to new outbreaks of the Omicron variant of the Coronavirus with partial lockdowns. This could further delay the availability of laptops with 12th Gen Intel Core processors and NVIDIA’s Ti graphics cards, which debuted at the beginning of the year.
- The first factories have already been closed in Suzhou in the east. Supply chain and logistics bottlenecks, a shortage of certain chip types, and price increases are already on the horizon.
Last year, component and chip shortages mainly impacted the desktop PC market, but, given recent developments in China, the situation now threatens to worsen for laptop manufacturers. According to a Forbes storey, local officials responded to an Omicron outbreak in the Suzhou Industrial Park in eastern China with a partial shutdown on Tuesday to break infection links. The present measures affect factories such as Bosch’s, United Microelectronics Corporation’s, and Samsung’s. Authorities have already ordered the temporary shutdown of other production plants and regular testing and workforce reorganisation. Suzhou is one of China’s high-tech development areas, and it’s where XMG’s ODM partners Uniwill and Clevo, among others, have factories.
Due to increasingly limited transportation resources, even components and computers that have already been manufactured often only make it to the next plant or the destination country for sale with a considerable wait. The logistics businesses are already at capacity, which accelerates the rise in transportation costs and noticeably raises the price of new laptop generations. In addition, procurement prices for individual components, base materials, and raw materials have increased.
The lockdowns in some parts of Suzhou are exacerbating the problem: according to local XMG partners, the city’s DHL hub has now been impacted by the shutdowns as well.
Specific important components for laptop production, such as power ICs, are still in low supply and can only be purchased in a roundabout way and at a significantly higher purchase price than usual – another factor that might potentially halt the production of the entire model series. According to recent media estimates, the overall IC scarcity in the industry could last until 2023.
Meanwhile, SSD pricing rises are threatening to cause problems. Contaminated chemicals were used at two combined semiconductor plants of Kioxia (formerly Toshiba) and Western Digital in Japan, rendering at least 6.5 exabytes of previously produced memory useless – comparable to the capacity of 6.5 million 1-terabyte SSDs. Together, the two companies have more than a third of all NAND flash globally. As a result, industry research firm TrendForce expects a price hike of up to ten per cent in the second quarter of 2022.