(P) The semiconductor crisis: An opportunity for the refurbished market
The semiconductor crisis has been limiting the availability of electronic products and is gradually leading to increased prices across industries. The alternative is refurbished products, whose quality is similar to new devices, at a competitive price.
Apple estimates that it is losing more than $1 billion a month due to the semiconductor crisis. The global car industry is losing about 400,000 car sales a month for the same reason.
From phone manufacturers to car manufacturers, all industries are impacted, to a greater or lesser extent, by the semiconductor crisis.
No one expected this at the beginning of 2020. At the time, semiconductor manufacturers were anticipating a significant increase in demand due to the 5G technology and its widespread use, especially in the automotive industry.
The demand for electronics has soared
The coronavirus pandemic hit Europe and North America in 2020 and radically changed our lifestyle in a very short time.
Many companies started working remotely and students switched to online classes. Long periods of lockdown meant that almost everyone spent more time at home. As a result, sales of laptops, computers, tablets, TVs, and game consoles skyrocketed.
The official data for the computer market (desktops and laptops), analyzed by Gartner, highlights this trend. After a long period of decline, computer sales increased by 4.2% in the second quarter of 2020 (Q2 2020) compared to the same period in 2019 (pre-pandemic). Sales went up by 3.6% in Q3 2020 and by 10.7% in Q4 2020, and peaked in Q1 2021, marking an increase of 32%, before going down to 4.6% in Q2. At the same time, unofficial estimates for console sales in Q2 2020 showed that these doubled for XBOX One and almost tripled for Nintendo Switch.
The steady demand from the IT industry, along with the sharp rise in the demand from the automotive industry has caused the semiconductor crisis to spread to other industries as well.
Game consoles and video card manufacturers were hit the hardest, especially as cryptocurrency mining has pushed the demand for video cards up. Apple has already reported production delays for the iPhone and the MacBook line.
Ironically, Samsung, the world's second-largest semiconductor maker, has also announced delays in launching a few of their top smartphones for the same reason: at the moment, the demand for semiconductors far exceeds the supply.
The impact on the Romanian market
Compared to the main European economies, car and IT markets in Romania are small, which is why the consequences of the semiconductor crisis are delayed and, so far, somewhat diminished.
However, even in our market, there are signs warning of a semiconductor crisis. The best example is the limited availability for the Sony PlayStation 5 console and a few powerful video card models.
The solution: Refurbished equipment
As long as electronic products will continue to have limited availability even at increased prices, a solution could be refurbished products.
The main advantage of a refurbished product is that the equipment itself already exists. Secondly, refurbished products have very little wear, often imperceptible, so they have a pleasant look.
Moreover, the hardware components are checked in detail before being marketed, so refurbished products work at optimal parameters. Therefore, components such as the screen (no dead pixels, stains or cracks), RAM, hard disk or SSD, power supplies or motherboard capacitors are all tested. In the case of laptops, the battery life is also checked and, depending on the situation, can be replaced with a new one.
Refurbished products have a warranty of at least 24 months, which can be extended by up to 60 months.
“In the context of the semiconductor crisis, refurbished products are starting to be more and more popular on the Romanian market. Their quality is very close to that of a new product, at a competitive price. However, stock limitations are already beginning to appear in this segment as well. Due to the low availability of new equipment, large companies prefer to postpone the purchase of new products and keep using those they bought before the crisis ", explains Radu Moți, CEO of Server Config.
Server Config is a certified refurbisher and meets all the standards of product manufacturers. The company provides consulting services, sets up and sells high-end laptops, professional workstations and refurbished servers from well-known manufacturers such as Dell, HP or Lenovo.
Server Config is the first and only Romanian company that offers dedicated IT solutions for industries such as engineering, construction or architecture, and for creative industries such as design, industrial design and photo/video editing.
The estimated future increases in semiconductor prices will influence how much Romanian customers will pay for electronics. In fact, in September 2021, TSMC announced a gradual increase by up to 20% in semiconductor prices, which will impact the prices of available end products over the coming months and years.
More importantly, the semiconductor crisis does not look like it is going to end very soon. Intel and TSMC estimate that it will continue throughout 2022, perhaps even 2023, despite promises to increase production capacities.
How to limit the financial damage
Taking into account the predictions, a wise solution is to start thinking long-term, whether you are just an end user or a manager in an IT department.
A rise in prices for IT equipment is more than likely, so, from a financial point of view, the best move is to think whether now is the right time to invest in the replacement of the IT devices that you manage.
If they already have a relatively high degree of wear and tear and you have to upgrade in the near future, the best financial solution is to speed up the process. In this case, Server Config offers refurbished products of the highest quality at an affordable price. Take advantage of our current stocks, as the next increase in semiconductor prices will inevitably impact this market segment as well.
If you need help choosing the right refurbished IT equipment for your or your company, Server Config sales department is ready to assist: +40 770 509 776, firstname.lastname@example.org.
(p) - This article is an advertorial.