[house]

The "hedonic quality adjustment method" is just plain absurd. It has never accounted for or acknowledged a loss in quality as far as I understand. They just assume everything gets better. Hides inflation and cheats BNP calculations.

I see a period of significant inflation due to the fact that the U.S. will have to devalue the currency again to pay for all the enormous spending bills going through Congress. Unlike Brasil and Mexico, the U.S. doesn't just announce a devaluation, they just quietly adjust the amount of "money" in circulation by loans to banks from the Federal Reserve. And, since the banks are allowed to loan out lots of "money" they don't actually have at a rate determined by the amount they get from the Fed. (if their "reserves", the amount of fictitious "money" they get from the Fed is $x, they're allowed to loan out some multiple of $x, even though the "money" they're loaning doesn't actually exist).

But, since the U.S. went off the gold standard in 1968, there hasn't actually been any real money for a long time - the "federal reserve notes" just represent your share of the national debt (a "note" is merely a promise to pay money in the future). (I reckon we didn't learn much from the Weimar Republic's experience in the late 1920's.) And, since most other countries' currencies are tied to that of the U.S., well, you know.... expect to pay more for everything.

[beholder3]

Given all the material and supply chain shortages I bet previously "normal" price reductions and special offers (black friday) this year will be much more limited in scope and value.

Demand is much higher than supply, so prices are bound to go upwards rather than downwards.

Tons of products have actually not seen any price drops for more than a year. In the case of Canon RF lenses they now are even more expensive than a year ago, back up to intro MSRP from 2 years ago here.

[mee]

SSD manufacturers are apparently also using lower quality NAND chips in their designs now due to the shortage. Which reduces the lifespan and speed of the drives.


That is the other aspect not yet mentioned. Even if the price doesn't go down, companies could simply cut corners on the products.


This happens all the time on food products -- reducing the size of the items but keeping the box size and price the same or similar. Sometimes changing the recipe.


I wouldn't be surprised to see more inferior designed electronics out there now due to the shortages, but I doubt we see it in camera manufacturers though.

[reh321]

I've never seen prices drop since I was born, either flat or increase, depending on period. In the long run, wages increase as well. What I'm seeing more and more however, is the price of basic goods stays the same (rice, pasta, toilet paper, water, electricity etc...), and the price and variety of non-essential good is on the rise (things like electronic devices, insurance, travel). The price of some basic products (yet essential) can get to be ridiculously low.

For a long time, the prices of integrated circuits did effectively decrease, as manufacturers found better ways to make them, and “yields” {and designs} continually improved.

[normhead]

I'm glad I have enough cameras and lenses to survive a few years of supply chain interruptions. Cameras are at the top of my survival kit list, next comes water, then food, toilet paper etc...

At this point I have what I need, and back-ups for everything I need.

[reh321]

SSD manufacturers are apparently also using lower quality NAND chips in their designs now due to the shortage. Which reduces the lifespan and speed of the drives.

SSD’s are a good example of deflation in the electronics industry.
For many years, the concept was not feasible, because of pricing, but then the lowering prices of memory chips made them feasible.
I’m not sure of current pricing and reliability.
Don’t forget that companies can enter the market, so this industry is very dynamic - what is true today may not be true tomorrow.

[vonBaloney]

Yes, this should eventually lead to increased manufacturing capacity globally

[KC0PET]

Just an out-there speculation. There are many of other companies that manufacture microprocessor chips, such as SMTMicroelectronics, Texas Instruments, Infineon Technologies, etc. Perhaps some of the competition will step up their capabilities and put a competitive pinch on Taiwan Semiconductor to keep the price increases under control.

At the same time, all sorts of semiconductor electronic devices have remained very cheap due to cheap manufacturing in certain Countries for a very long time. I have been wondering when we would start to see significant cost increases in all sorts of electronic devices.

---------- Post added 08-31-21 at 11:08 AM ----------

SSD’s are a good example of deflation in the electronics industry.
For many years, the concept was not feasible, because of pricing, but then the lowering prices of memory chips made them feasible.
I’m not sure of current pricing and reliability.
Don’t forget that companies can enter the market, so this industry is very dynamic - what is true today may not be true tomorrow.

Yes very well said, I suspect that we will see some new or even old players step up...

[Robert92A1]

Folks -

I am a manufacturer. I make goods in the USA, in Indonesia and in China. There are huge inflation pressures on all sorts of raw materials, labor and services (shipping). The expectation is that the inflation will continue until 2023. No talk of prices falling. If you want it - buy it now - it will not get cheaper.

Welcome to the 1970's.

Bob

MX, Super Program, K1 Mark II

[Thwyllo]

The average cost of a mass produced chip is a few tens of $$s at most. The idea of "significant price increases" as a result of temporary shortages is nothing more than hysterical nonsense.

[jersey]

Just an out-there speculation. There are many of other companies that manufacture microprocessor chips, such as SMTMicroelectronics, Texas Instruments, Infineon Technologies, etc. Perhaps some of the competition will step up their capabilities and put a competitive pinch on Taiwan Semiconductor to keep the price increases under control.

I doubt it, at least for low nanometer proccesses. There is simply not enough machines to produce those chips and if I am not mistaken only one company makes those machines. And TSMC already announced new factory so I suppose they already booked those machines. Plus the company is in EU so with European Uninon going toward making their own chips I suppose sooner or later there will be mild ban on export of those machines to provide EU based factories with equipment.

For lower quality (high nm proccesses) chips - maybe. We are living in interesting times, sadly.

[reh321]

I doubt it, at least for low nanometer proccesses. There is simply not enough machines to produce those chips and if I am not mistaken only one company makes those machines. And TSMC already announced new factory so I suppose they already booked those machines. Plus the company is in EU so with European Uninon going toward making their own chips I suppose sooner or later there will be mild ban on export of those machines to provide EU based factories with equipment.

For lower quality (high nm proccesses) chips - maybe. We are living in interesting times, sadly.

and the question is whether those chips are still under legal protection {patent or copywrite}.
The newer chips may be protected - and redesign would be required to use others.
Some thing like the “6502” - the ‘Apple’ chip on which the chip in question is based - would no longer be protected, but in this case you truly do get what you pay for.

[mee]

The average cost of a mass produced chip is a few tens of $$s at most. The idea of "significant price increases" as a result of temporary shortages is nothing more than hysterical nonsense.

I would buy now not necessarily because prices are going to rise dramatically, but because supply constraints are likely to last a lot longer mixed with shipping constraints going into a traditionally extremely high volume time for both demand and shipping.

One article I read on the topic even mentioned it could take 4 - 6 weeks to get certain items as a result.


I'm already seeing the squeeze right now. Amazon Prime order shipped directly from Amazon usually takes 1-2 days, now its taking a full week. B&H order that usually takes 2-3 days, now taking 13 days (for in stock item).


I don't think it is getting any better any time soon.