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Consumers planning to buy a new smartphone, laptop, television, or other electronic gadgets in the coming weeks may need to brace for higher prices. Industry experts warn that the cost of popular electronics could increase by up to 8% between February and March, driven primarily by a growing shortage of semiconductor chips worldwide.

Why Are Electronic Devices Getting Costlier?

At the heart of this price hike is the surging demand for advanced chips in the Artificial Intelligence (AI) sector. Semiconductors, often described as the “brain” of electronic devices, are essential for processing data, storing information, and ensuring smooth performance. While consumer electronics like mobiles, laptops, and TVs rely on these chips, the AI industry now consumes them at an unprecedented scale.

With AI technologies expanding rapidly—across data centers, cloud computing, machine learning models, and automation—the demand for high-performance chips has skyrocketed. As a result, chip manufacturers are increasingly diverting their production capacity toward AI-focused clients, leaving fewer chips available for traditional consumer electronics.

AI Chips Take Priority Over Consumer Electronics

One of the key reasons behind this imbalance is profitability. AI-grade chips are significantly more expensive than those used in smartphones or household electronics, offering higher margins to manufacturers. Naturally, chipmakers are prioritizing AI companies, which can pay a premium for advanced processors.

This shift has reduced the availability of chips used in everyday devices. When supply drops and demand remains steady—or grows—prices inevitably rise. The impact is now being passed on to consumers in the form of higher retail prices for gadgets.

Impact Beyond Phones and Laptops

The chip shortage is not limited to consumer electronics alone. Automobiles—both electric and conventional—also depend heavily on semiconductors. Although vehicles typically use older-generation chips, production of these legacy chips has slowed significantly as manufacturers focus on newer, high-end designs.

This reduced output may also affect vehicle prices in the coming months, adding pressure to an already cost-sensitive market. Industry analysts believe that the ripple effect of the semiconductor crunch could be felt across multiple sectors.

No Quick Relief in Sight

Unfortunately, there is little hope for a short-term solution. Setting up a semiconductor manufacturing plant is a complex and capital-intensive process that typically takes three to five years. From land acquisition and infrastructure development to technology setup and workforce training, the timeline is long and resource-heavy.

Experts estimate that the chip shortage could persist until at least 2028, when new manufacturing units are expected to come online. Until then, supply constraints are likely to continue, keeping prices elevated.

What This Means for Consumers

For buyers, this situation calls for careful planning. Those considering an upgrade may want to act sooner rather than later, as prices are expected to climb gradually over the next two months. Budget-conscious consumers might also explore refurbished devices or wait for seasonal discounts, though such offers may be limited due to rising base costs.

Looking Ahead

The global electronics industry is undergoing a significant transition, with AI reshaping priorities across the supply chain. While technological progress continues at a rapid pace, the imbalance between chip demand and supply poses challenges for manufacturers and consumers alike.

Until production capacity catches up with demand, higher prices for electronic gadgets may become the new normal. For now, awareness and timely purchasing decisions remain the best strategies for consumers navigating this evolving market.