Why it matters: If you’ve been putting off that PC upgrade or new laptop purchase, you might want to pull the trigger sooner rather than later. Tech prices are on the rise, thanks largely to skyrocketing costs for the precious metals and other raw materials used in electronics manufacturing.
The perfect storm of factors is conspiring to make our beloved gadgets pricier. Copper prices have been the real shocker – from around $5,000 per metric ton back in 2020 to $8,300 today, according to a report by DigiTimes. With copper wiring used in practically every electronic device, that spike is bound to filter down to consumers.
The increase is already impacting some suppliers. Several Chinese semiconductor companies have recently notified customers that they’re jacking up prices by 10-20% immediately to account for materials inflation. Firms like battery protection experts ICM, circuit designers Yaxin, and testing houses like HaloChip and Chiplink are all passing along these higher costs.
You may not have heard of those companies, but they supply crucial components to some of the biggest names out there – Intel, Broadcom, Texas Instruments, and many more – meaning the price hikes are going to reverberate through the whole supply chain eventually.
It’s not just about copper. Precious metals like gold are also getting more expensive for manufacturers to source. Between that and the huge demand for AI hardware like GPUs and storage, every piece of the electronics puzzle is seeing price pressures.
Compounding the pain, Western Digital last month warned of immediate price hikes on storage products this quarter due to soaring demand. And analysts predict client SSDs could see double-digit percentage price jumps through Q2 2024 alone after rising in Q1. With DRAM also projected to get 10-15% pricier for PCs and servers, the array of increasing costs spells trouble for builders and upgraders.
While these previous price hike projections may not be directly tied to the metals crunch, those rising costs on top of the higher component expenses from materials inflation mean PC builders and upgraders are stuck between a rock and a hard place.
The situation brings to mind the GPU pricing insanity during the crypto boom and pandemic years. But unlike those relatively short-term phenomena, this materials crunch could be more long-lasting. The appetite for AI hardware is only growing, putting more strain on already tight supplies.