As China tries to cope with the shortage of power supply, India-based electronic makers may find it tough sourcing components required
The electronics industry of India depends a lot on its neighboring country China to source components. As a matter of fact the country imports close to 75 per cent of components from China. And if he semiconductor shortage was not enough to haunt the Indian manufacturers, the power shortage in China has raised more goosebumps in the industry.
Various component and product factories in China are running on half their capacities due to the power shortage leading to less manufacturing and supply of inventory. While the cost of a lot of components has gone up four to five times, the lead time of these components getting delivered to India has also risen from three weeks to two months.
The last nine months have registered input costs gong up by almost 23 per cent, and a lot of appliance makers have already hiked prices of their products by almost 15 per cent. Come the end of this festive season sales, the end consumer might have to pay a tid more to source an electronics appliance. The industry is yet to feel the heat as most of the brands start preparing for festive sales well in advance, and stock components they require.
Several reports covering CEOs of Chinese firms have noted about absolutely zero clarity about he end of energy crisis in China.
“If the crisis continues, it will reduce manufacturing output significantly and lead to lower export cargo volumes and longer lead times. For example, some manufacturers have started giving priority to orders for higher-value goods,” Loadstar quoted a Shanghai-based forwarder.