China, which is one of the biggest links in the supply chain of the tech market, is currently introducing partial lockdowns due to the new outbreaks of the Omicron virus in the country. The sudden introduction of these lockdowns will delay the availability of the upcoming 12th Gen Intel Core processors and NVIDIA’s Ti graphics cards.
Factory closure in Suzhou has created a lot of chaos and restlessness among the manufacturers and brands. The delay from supply chains with the issues with logistics can further result in lacking shortages of the available chipsets, further increasing the prices.
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Sudden partial closure of factors in Suzhou
The panic started with the partial closure of a few factors in east of China in Suzhou. The local authorities in China are being prompt with handling the outbreak of the Omicron variant, announcing partial lockdowns to combat further spread.
These sudden measures affect the number of factories in the area, including Bosch, United Microelectronics Corporation (UMC), which is leading semiconductor manufacturer and the staple brand, Samsung.
Besides these big brands, even a range of local factories and production plants have been shut down temporarily by the ruling authorities to break the infection cycle in the area. They are also advising regular testing and minimal manpower to prevent further spread.
All of this happening in Suzhou is directly affecting the tech production, primarily because the area boasts some of the most popular high-tech development centres. Most of the popular brands like Uniwill and Clevo have their development centres there.
Lacking transportation chain
Besides the production and manufacturing, the issues also lie with logistics. Even with the parts and the chipsets completely done and produced, there are complications and a lot of delay with the products getting shipped out to their destinations due to the lacking transportation resources.
The delays are pushing the transportation companies to their limit, who are already working at full-capacity. This is further fuelling the logistics cost, which will reflect on the price of the new generation laptops that will soon be available in retail. This will be due to the higher prices of the individual components, the base and the raw materials too.
Shortage of supply of key components
Another concern is with the lacking availability of a few key components essential for laptop production. This includes power ICs, which are very short in supply but high in demand, leading to a heightened pricing. The reports also suggest that this shortage could very well lead on till 2023.
Tom Fichtner, Senior Product Developer at XMG further highlighted on the shortage and the delays saying that they are in constant touch with their suppliers and manufacturers. According to them, the deliveries and postponement can even last up to several weeks, which is quite disappointing.
Fichtner, who is based out of Taiwan, said that XMG NEO 15 (E22) with OASIS liquid cooling will likely get the announced release and availability in the retail. However, the other upcoming models like XMG FUSION 16 or the revised XMG PRO series that come with the latest 12th Gen. Intel core processor might witness a delay.
Increased price of SSDs
Besides all of that, there is a looming threat in the rise of the price of SSDs in the market. Two joint semiconductor plants – Kioxia and Western Digital’s use of contaminated chemicals have made around 6.5 exabytes of produced memory unsuable. This includes 6.5 million 1-terabyte SSDs, that has now gone to waste.
Given that these two companies are responsible for around third of the global NAND production, the market is going to experience a steep rise in the pricing of available SSDs in the future.
