Xiaomi warns the global chip shortage could increase phone prices

There’s a major shortage in computer chips, mainly due to the COVID-19 pandemic, making it difficult to find products like the PlayStation 5 and Xbox Series X/S. Apparently, the issue has reached a point where company costs are rising, which Xiaomi said may eventually be passed on to consumers.

In a recent earnings calls (via Reuters), Xiaomi president Wang Xiang implied that due to global shortages, some of its products might go up in price.

“We will continue to optimize the costs of our hardware devices, that’s for sure,” Wang said. “To be honest, we will do our best to offer the best price we can to consumers. But sometimes, we may have to pass part of the cost increase to the consumer in different cases.”

A number of factors have led to a global shortage in computer chips, including increased demand, slowdowns in production, and sanctions against China from the previous U.S. administration. These issues have all converged to create chaos in the supply chain. Qualcomm, for example, which supplies chips for many of the world’s top OEMs, is struggling to meet orders.

Wang admitted that due to the current landscape, the company is “feeling pressure.” It could mean Xiaomi’s products, which are typically priced on the lower end of the spectrum, could get more expensive. Hopefully, if that does happen, it doesn’t become a trend across the industry.

It’s a difficult situation all around. Passing the cost down to consumers during a pandemic, when many people are unemployed, could be detrimental to a brand. But it makes sense from a business perspective, especially when so many companies are competing to secure the same chips.

Now that vaccines are rolling out in some parts of the world — and lockdown restrictions are being lifted — it remains to be seen if things will turn around. For now, Wang said that Xiaomi is “looking okay,” so let’s not sound the alarm just yet.

Featured image shows off the Xiaomi Mi 11

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