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Chip shortage reaches home appliance manufacturers
Home appliance manufacturers are the latest victims of the global semiconductor shortage, Reuters reports, citing Whirlpool President Jason Ai. The American company manufactures its products in China and is one of the largest suppliers of household appliances to Europe and the USA with a market share of up to 25%.
“The situation is worse than ever. On the one hand, we must somehow satisfy the demand in the domestic markets, on the other, we have a sharp increase in the number of export orders, «Ai said on the sidelines of the Appliance and World Electronics Expo, which began today in Shanghai.
The company is struggling to supply microcontrollers, the simple processors that power half of Whirlpool’s products, including microwaves, refrigerators and washing machines.
Semiconductor shortages are faced by many manufacturing segments, including mobile. However, the most obvious damage was caused by the shortage of chips to automakers. Beginning in December last year, it was partly caused by an incorrect assessment of demand by the latter, and on the other hand, by a sharp jump in sales of smartphones and laptops against the backdrop of a protracted pandemic. As a result, such large car companies as General Motors were forced to reduce their production, and smartphone manufacturers like Xiaomi were forced to increase the cost of their new products.
Image source: Reuters
Every company that uses semiconductors in their products is now trying to buy chips, and not only Whirlpool, but also other manufacturers of household appliances faced a shortage. For example, Hangzhou Robam Appliances Co Ltd, a Chinese home appliance company with 26,000 employees, was forced to postpone the release of a new premium exhaust ventilation system by four months due to a lack of microcontrollers to begin mass production.
“Most of our products are optimized for use in a smart home, so we need a lot of chips,” Robam advertising director Dan Ye told Reuters.
He added that the company found it easier to buy chips from China than from abroad, so it decided to revise its strategy for future semiconductor procurement.
“The chips we use in our products are not state-of-the-art. Therefore, local producers are able to fully meet our needs, ”explained Ye.
The margin in the home appliance market is already not the highest, but the shortage of semiconductors has led to the fact that the income of manufacturers in this segment has decreased even more. According to Robin Rao, director of planning at Sichuan Changhong Electric Co Ltd, a China-based home appliance firm, the long cycle between appliance replacements, combined with high competition and stagnant real estate, has led to a reduction in profit margins.