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    Chipset Challenges to Resolve by Next Quarter

    Chipset and smartphone makers in India expect component supply chain-related challenges to resolve to start the second half of this year. Handset brands, however, think that market operating prices of certain products need to increase to maintain sustainability.

    “Q2 of this year will see semblance between supply and demand for phones at least. For the rest of the verticals, it will be dragged to the end of the year. We see more sanity coming to the system, settling down to Q2. Automotive and other industries, which have fueled the demand, will have to be streamlined as the auto supply chain is a lot different than smartphones,” Rajen Vagadia, VP and President, Qualcomm India and SAARC.

    Anku Jain, Managing Director, MediaTek India said that the demand surpassed supply significantly due to covid-related uncertainty and lockdowns, but after two years the smartphone industry will see challenges elevated.

    “We have been working with OEMs and smartphone partners to see through the problem. By the middle of this year, we will reach a solution to this problem. Despite shortages, our revenues have grown but the shortage is impacting various verticals,” Jain said.

    Madhav Sheth, CEO realme India, VP, realme and President, realme International Business Group said that the fluidity of the lockdown situation across India has had a deep-rooted effect on the smartphone industry including, causing supply chain problems.

    “Global chipset shortage is one such major issue. In Spite of these ongoing challenges, we expect the issue to improve until after the second quarter of 2022, as production and distribution facilities will steadily open and expand their operations,” he added.

    Tejinder Singh, Head-Product, Lava International Ltd seconded views of Realme and chipset makers and said that the company has localized a portion of its supply chain and also established long-term agreements with key component vendors like MediaTek in the chipset segment and a few other key vendors.

    “The challenges are due to supply-demand mismatches on a global scale. The problem will ease out though, as per our interaction with supply chain partners, the problem will start reducing from the second half of 2022,” Singh added.

    Sheth, however, said that to maintain sustainability, everyone in the Indian market will have to increase the market operating prices of a few products, as none of the brands, including Realme, can absorb it all.

    “…the pricing has been impacted by ongoing supply chain issues; however, the industry has done its best to absorb the pricing. To ensure that our consumers do not face a supply shortage for our current products, we collaborated with the mainstream chipset makers and third-party suppliers,” Sheth added.

    Tarun Pathak, research director at Counterpoint said that while shortage at large is expected to ease from the second quarter onwards, it will vary from part to part. “PMIC (  management IC) ade still in short supply.”

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