The bad news! Smartphones will become even more expensive in 2023
Prices in the world are constantly rising. This is called inflation. But not only this economic phenomenon is to blame. In addition to inflation, there are still a huge number of factors that have accumulated over the past couple of years that affect price increases. And as for high-tech products, it also becomes more expensive due to developments. In general, there are enough reasons. But due to the decision of one particular company, we can see a significant increase in the prices of smartphones, which will be in 2023. Let’s understand why this will happen, and then we will think about whether it is worth saving money for a new phone or is it better to buy it now.
Will phones go up in price?
This time around, processor maker TSMC is the main source of price increases. The company has determined that prices for most processes will increase by about 6 percent from January 2023. This increase will come despite recent concerns that demand for new smartphones will fall in the second half of 2022. Although the fall was already observed in the first half. As a result, fewer smartphones were sold in Europe than there have been since 2013. These are not only echoes of the pandemic, but also of many other reasons. Among them: a general decline in interest in new products that are not much different from older models, supply problems, economic difficulties, and a shortage of electronic components in the world.
What will happen to the smartphone market
According to a Digitimes report, many IC companies are pessimistic. The sales outlook for the end of 2022 is not the best. Orders from equipment suppliers are expected to decline amid growing macroeconomic uncertainty. However, TSMC and other chip factories in Taiwan may still be in a situation where their 2022 revenue reaches an all-time high, the source said.
The report also states that orders from TSMC and other major customers in Taiwan have not declined significantly. Customer orders still account for over 95 percent of production capacity . Taiwanese foundries are also mainly interested in expanding capacity as they have a long-term commitment to customers.
Why phones are getting more expensive
In addition, the increase in the price of the final product is influenced by the increase in the cost of raw materials and labor. Combined with rising energy costs, they put pressure on factories. As a result, they raise prices and want to increase sales.
The insider also claims that the long supply cycle of semiconductor equipment slows down the expansion of the world’s board factories. That is, factories simply cannot do what they need now, but are distracted by the technology race. Right now, manufacturing equipment lead times can easily reach an impressive 30 months. There are no signs of a reduction at this time. Thus, a strong increase in production and an increase in production capacity are not expected. After all, OEM equipment is also in short supply.
Right now, some of the major chip manufacturers in the industry are relying on TSMC’s manufacturing. MediaTek is currently using chips from this factory for its Density and Helio line. Qualcomm left Samsung for TSMC for Snapdragon 8+ Gen 1 SoC. Snapdragon 8 Gen 2 will also be produced at TSMC facilities. As a result, we expect smartphones to be more expensive next year.
It is worth noting that TSMC is about to begin mass production of its 3nm chips. However, we may not see this process for smartphones until 2024.
Is it worth buying a phone now
In any case, prices will not fall. But there is no doubt about their growth. While it’s hard to predict what this growth will be, but if you wanted to buy a phone, it might be worth starting to look for a good offer now so that you don’t have to pay 20-25% more next year. Moreover, the smartphones themselves still do not change so much as to become obsolete in these six months or a year.