Memory Chip Prices Set To Rise Over Next 12–18 Months Amid Supply Constraints: IESA President

New Delhi, May 20 (KNN) Consumers should brace for higher memory chip prices over the next 12 to 18 months, as no significant new manufacturing capacity is expected to come online in the near term, a senior official of the India Electronics and Semiconductor Association (IESA) warned on Wednesday.

Supply Gap Fuelling Price Pressure

IESA President Ashok Chandak speaking on the sidelines of a Bharat Digital Infrastructure Association event, stated that establishing a memory fabrication plant is a time-intensive process and cannot be accelerated on short notice.

Chandak said, "Memory makers can not set up a plant in a few days. We are not seeing any significant capacity coming up in the next one and a half years. There will be a price rise due to high demand, and consumers will need to bear the burden," as quoted by PTI.

Device prices, particularly smartphones, have already risen by 20 to 30 per cent over the past six months. Adding to the supply strain, the entire Indian production capacity of American memory chip manufacturer Micron has reportedly been booked owing to surging demand.

West Asia Crisis Adding to Supply Chain Stress

Chandak flagged that the ongoing conflict in West Asia is compounding pressures on the broader electronics supply chain. 

"The critical raw materials, such as petrochemical plants, diesel, manganese, chemicals, and other gases, have seen an impact. It has an impact on the economy as well. Some electronics components have also been impacted," he noted.

India Semiconductor Mission 2.0

On a longer-term note, Chandak expressed confidence that India Semiconductor Mission (ISM) 2.0 would help ease the country's dependence on imported components and strengthen the domestic semiconductor ecosystem. 

When asked about industry expectations for the programme's incentive outlay, he indicated it should exceed the USD 10 billion allocated under the previous edition.

(KNN Bureau)