Refrigerators and microwave ovens fall victim to global chip shortage

        SHANGHAI, March 29 (Reuters) – A global chip shortage that has disrupted car companies’ production lines and reduced inventories for electronics makers is now putting home appliance makers out of business, Whirlpool Corp (WHR.N) president says. . needs. in China.
       The US company, one of the world’s largest home appliance companies, shipped about 10 percent fewer chips than it ordered in March, Jason I told Reuters in Shanghai.
        “On the one hand, we have to meet the domestic demand for home appliances, and on the other hand, we are facing an explosion in export orders. As for the chips, for us Chinese, this is inevitable.”
       The company has struggled to provide enough microcontrollers and simple processors to power more than half of its products, including microwave ovens, refrigerators and washing machines.
       While the chip shortage affects a number of high-end vendors, including Qualcomm Inc (QCOM.O), it is related to established technologies and remains the most severe, such as power management chips used in more
        Chip shortages officially began in late December, partly because automakers miscalculated demand, but also because of the surge in smartphone and laptop sales caused by the pandemic. This has forced automakers including General Motors (GM.N) to cut production and raise costs for smartphone makers such as Xiaomi Corp (1810.HK).
       As every company using chips in their products panic buys them to replenish their stocks, the shortage has not only taken Whirlpool by surprise, but other appliance makers as well.
       Hangzhou Robam Electric Co Ltd (002508.SZ), a Chinese appliance manufacturer with over 26,000 employees, was forced to delay the launch of a new high-quality cooker by four months because it could not purchase enough microcontrollers.
       “Most of our products are already optimized for smart homes, so of course we need a lot of chips,” said Ye Dan, director of marketing for Robam Appliances.
       He added that it was easier for the company to source chips from China than from overseas, prompting it to reconsider future shipments.
       ”The chips used in our products are not the most modern, domestic chips can fully meet our needs.”
       Due to shortages, the already limited profits of home appliance companies have shrunk even further.
       Robin Rao, director of planning for China’s Sichuan Changhong Electric Co Ltd (600839.SS), said long appliance replacement cycles, coupled with fierce competition and a slowing real estate market, have long contributed to low profit margins.
       Dreame Technology, a Xiaomi-backed vacuum cleaner brand, has slashed its marketing budget and hired additional staff to manage supplier relationships in response to a shortage of microprocessors and flash memory chips.
       Dreame has also spent “millions of yuan” testing chips that could replace the ones it normally uses, said Frank Wang, Dreame’s director of marketing.
       “We are trying to get more control over our suppliers and even intend to invest in some of them,” he said.
       US President Joe Biden arrived in Belfast on Tuesday at a challenging time for Northern Ireland politics, helping to mark the 25th anniversary of a peace deal that effectively ended three decades of bloody conflict.
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Post time: Apr-11-2023