Raw material shortage hits electronic manufacturers

Published on March 11, 2021 by

Steep increase in metals hikes the selling price of electronic goods. 


Bengaluru: The limited availability of raw materials like copper and aluminium has resulted in the price hike of electronic goods. Electronic coils and components manufacturers said that the selling cost may increase by 1.6 times.


Hariharan N., Technical Director, m2nxt, a company that manufactures electronic components said, “My entire value chain is constant. There is no problem with my delivery and the assembly process. If raw material cost increases by 20 percent, then the selling cost will increase by Rs. 29.”


PartibanVinayagam, Senior Executive, Siemens, said, “Ten to 12 percent increase in the material cost may not result in an abrupt hike, but there would be a gradual increase in the prices for consumers.”


Rajendra Galocha, member of Bangalore Electronic Association (BEA), S.P. Road said, “It is a good time for the electronic industry as many people switched to work-from-home. Overall, the sale of both IT and hardware businesses increased by 50 percent.” He also said that the prices of electronic products have increased by 20 percent. 


Nagarajan H.C., a consumer said, “People are working from home and cashless transactions require us to have a mobile phone. Moreover, the devices are updating their operating systems hence we need to upgrade ourselves. Therefore, we are forced to buy electronic products.”


 A report by India Electronics and Semiconductor Association (IESA) states that the demand for Indian Electronics Market will accelerate from 14 percent annual growth to 16.6 percent between 2020-25.


Soumen Chatterjee, Commodity Markets Head Research, JRK Stocks, said that a rise in raw materials prices would exponentially affect the customers. He said, “With the kind of demand that has come in, prices of air conditioners and other equipment will go up.” He also added that the government is imposing import duty on raw materials, but it is also boosting domestic manufacturing through a production link scheme.


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