Electronic Goods Prices May Go Up 10-25 Pc Due To Supply Constraints
The price impact will be greater for products such as smartphones, energy meters and electronics-intensive appliances than for products like washing machines or refrigerators.
Chennai : Electronic devices and appliances have already seen price hikes as some inputs, including memory components, PCU, PCB, and display items, become costlier due to Chinese curbs on rare earth magnets and AI-related demand. The industry expects prices to further go up by 10-25 per cent in one year.
Electronic product costs depend on three key factors: semiconductors, memory and other components.
Memory prices have already risen significantly because of global AI-driven demand, Ashok Chandak, President, India Electronics and Semiconductor Association (IESA) said.
Many suppliers are shifting capacity towards high-bandwidth memory, affecting the availability and pricing of conventional memory products such as DRAM and Flash. This has already impacted smartphones, laptops and appliances.
PCB costs have also risen due to raw material shortages and higher prices. Combined with increases in other component costs, electronic products could see overall price increases of around 10-25 per cent.
Some price increases have already taken place. Over the next year, products could become another 10-25 per cent more expensive depending on the category. The impact will be greater for products such as smartphones, energy meters and electronics-intensive appliances than for products like washing machines or refrigerators.
Further, there could be supply-chain vulnerabilities the display manufacturing. India's display manufacturing ecosystem is not expected to expand significantly in the next 12-18 months. Only one major project has been approved recently, while most current activities focus on display assembly rather than display fabs.
Due to the Chinese curbs on input exports, overseas investments and technology, electronics sector is likely to meet its growth targets.
India's electronics manufacturing sector is expected to reach $400 billion by 2030, while the broader electronics ecosystem could approach $500 billion when components and chips are included.
“There may be some short-term disruptions over the next three to nine months, which could affect production and exports temporarily. However, the long-term trajectory remains unchanged,” he said.
In FY27, for electronics manufacturing, India could achieve production of around $200-225 billion in FY27. Earlier targets may be missed by around 5-10 per cent.
According to Chandak, the industry should view the challenges as opportunities. There is a need to accelerate component manufacturing, PCB and substrate production, display ecosystem development, chemicals and gases manufacturing, rare earth processing and magnet production. India's semiconductor and electronics journey should not be seen as a race to catch up with any one country. It should be viewed as a long-term capability-building exercise.
“Current supply chain should remind us that the challenge is in achieving true competitiveness which can come not just by manufacturing products, but by owning technology, owning materials, and components,” he added.
