Key facts
- Indian electronics manufacturers are facing shortages of key components including microprocessors, batteries, and printed circuit boards.
- Production schedules are disrupted by longer shipping lead times caused by vessel shortages and uncertainty over routes through the Strait of Hormuz.
- Some companies, like Haier, have reported significant production shortfalls and reduced inventory cover.
- Prices for certain components, such as microprocessors and memory chips, have seen substantial increases.
- The supply crunch has expanded beyond memory chips to affect a broader range of electronic components.
- Helium supply issues have also been cited as a potential factor contributing to electronic component shortages.
Indian electronics and appliance manufacturers are facing significant production disruptions due to shortages of critical components such as microprocessors, batteries, and printed circuit boards. The ongoing crisis in Gulf shipping, marked by vessel shortages and uncertainty over routes through the Strait of Hormuz, has led to extended supply lead times and increased costs.
Companies like Haier have reported production falling 20% below planned levels in recent weeks, with inventory cover shrinking to just 10 days from the usual 25. Contract manufacturer PG Electroplast highlighted that microprocessor shortages and limited vessel availability are squeezing the supply chain, leading to a 10-12% price increase for television microprocessors. Amber Enterprises is proactively building component inventories to mitigate potential disruptions, while Whirlpool India is diligently monitoring component availability and supplier engagement.
Super Plastronics, which sells brands like Kodak and Thomson, has seen component shipment times increase by 10-14 days. Similarly, Lava International is experiencing about a 20% increase in delivery times for PCBs and batteries, which is beginning to impact its production. Haier India's president noted that local suppliers of sub-assemblies are facing a 20-30% labor shortage, further hindering the production of refrigerators and washing machines.
The supply crunch, initially concentrated in memory chips, has now spread across the broader electronics value chain. Memory chip prices have surged two to three times in the past seven to eight months. Industry executives attribute these issues to vessel shortages, shipping route uncertainties, and labor shortages among smaller component suppliers. Blue Star's managing director also pointed to potential helium supply issues, stemming from disruptions in Qatar, as a factor that could lead to a significant shortage of electronic components.
These component shortages and price hikes have forced electronics companies to raise prices almost monthly since January. Smartphone prices, in particular, have seen increases of up to 70% during this period, with the most significant hikes affecting entry- and mid-segment models.