Tech price hike: consumers face huge mark-ups, long delays as global chip shortage bites

Aussie shoppers are being hit with huge mark-ups for technology and forced to wait months for other products, as the global chip shortage bites.

Australian shoppers are being slugged with costs of more than double the recommended retail price for some electronics and asked to wait for up to a year to buy games consoles, laptops, and even smartphones as the global computer chip shortage reaches its peak.

Scalpers are now using bots and online marketplaces to exploit buyers looking to buy the most in-demand items, and even well-established brands are warning they will pass on growing price rises.

Sony’s PlayStation 5, as played by Nick Kyrgios, will continue to suffer delays due to the global chip shortage. Picture: Supplied

And industry sources warn the chip problems may not be resolved until well into 2022, forcing consumers to consider whether they can afford inflated prices or are willing to wait.

Worldwide shortages of semiconductor chips began last year after several of the largest manufacturers were forced to shut down during the Covid-19 pandemic.

But the shortages were magnified by unprecedented demand for home electronics during lockdowns, including laptop, desktop and tablet computers, televisions, smartphones, cars, and two next-generation games consoles.

Even the surging price of cryptocurrency heightened the shortages, with Bitcoin “miners” splurging on powerful computers as investments.

But the high demand is now biting customers, with prices for computers rising and online scalpers demanding — and getting — more than double the price for graphics cards.

The global semiconductor shortage was caused by a number of factors, including demand during lockdowns. Picture: STR / AFP

Evolve Gaming PC business owner Luke Christie said the same PC graphics cards he had been selling for $1100 during better times were now being sold “for $1900 to $2100 in stores” and price rises for new models were even worse.

When Nvidia released its new GeForce RTX 3080 cards this month, Australian stores almost immediately saw sellouts and mark-ups, Mr Christie said, with some scalpers using bots to buy them and online marketplaces to sell them for princely sums.

“Even when they listed these graphics cards for $3200 when they should have been $1900, they sold out in 60 seconds. And that was every single model that came out,” he said.

“What some retailers are doing is charging $2800, even $4500.”

Mr Christie said he had been advising customers to wait for lower prices since January, but he was no longer certain when prices and supply would return to normal.

“We were building 10 to 12 computers a week and now we’re only doing one or two because I am telling people to wait,” he said.

“If I was in the game full-time I’d be scared. How do you build computers when you can’t get the chips?”

But it’s not just powerful PCs hit by the chip shortage.

Samsung Note fans may have to wait until next year to see a new model.

Executives from big brands Dell, HP and Lenovo have all warned that prices would continue to rise and those price hikes would be passed on to consumers.

“Pricing is slowly going up,” Lenovo chief operating officer Gianfranco Lanci said while announcing the company’s results. “I think we’ll continue to go up for the next three or four quarters because of the component cost trend.”

The price of smart TVs has also risen about 30 per cent compared to last year, according to market research firm NPD, and chip shortages are also causing major delays.

Samsung mobile chief executive DJ Koh said the company — the world’s second largest chip maker — could be forced to delay the release of a new Galaxy Note device until 2022 due to the shortages.

“It could be a burden to unveil two flagship models in a year,” he told a shareholders’ meeting.

“The timing of the Note model launch can be changed but we seek to release a Note model next year.”

Sony also warned its PlayStation 5 console would remain in short supply until next year, and Microsoft said it expected ongoing delays to delivering its new Xbox consoles until later this year.

Gartner analyst Ben Lee said the world was currently suffering through “the most serious part of the chip shortage,” with some devices hit harder than others.

While delays of up to two months would continue to slow down product releases and force up prices, Mr Lee said the problem would see improvements by next year.

Originally published as Tech price hike: consumers face huge mark-ups, long delays as global chip shortage bites