Global chip shortage has reduced demand for smartphones — Reuters - UA.NEWS

The global smartphone market is facing an unprecedented crisis driven by a severe chip shortage, leading to the sharpest decline in shipments on record. According to Reuters, the shortage, worsened by... Read original →

This chip shortage stems not from insufficient capacity but structural misallocation: foundries like TSMC are prioritizing 3nm and EUV lines for AI chips, starving mid-to-low-tier smartphone SoCs. The ripple effect has inflated BOM costs across memory and PMICs. Geopolitical disruptions in the Middle East have spiked logistics and energy expenses, crippling Transsion and Xiaomi—brands heavily exposed to Africa and South Asia—while amplifying compliance risks. Apple, insulated by its vertical integration and premium margins, is leveraging the chaos to fortify supply chain control and advance its 2027 smart glasses roadmap. Over the next 12–24 months, sub-$150 smartphones will vanish, accelerating market consolidation. Foundries in Taiwan, China and mainland China lacking AI or automotive anchors face looming underutilization. This contraction is, in essence, a forced realignment of semiconductor value chains toward high-compute, high-margin domains.