Expect significant price increases sneaking in across most products

beholder3 · 08-26-2021, 11:48 PM

Quote:

TSMC is the biggest chipmaker in the world and the company responsible for the processors used by Apple, AMD, Nvidia, Qualcomm, and even some Intel products. And its products are about to get a lot more expensive: the company plans to raise prices of its advanced chips by around 10 percent and less advanced products by about 20 percent

TSMC is raising chip prices as supply shortages continue - The Verge

With cameras (and more recently lenses) being little computers, this will not take too long. And it will be in addition to what already happened.

That turns a $2000 camera into a $2200-2400 camera.

With the mechanics of supply chain bottlenecks and empty shelves there might be more effects driving up prices even for older equipment.

I guess the "wait to see the prices coming down" approach will need extra 2-3 years waiting time.

pschlute · 08-27-2021, 01:04 AM - **3 Likes**

Originally posted by beholder3

That turns a $2000 camera into a $2200-2400 camera.

But the cost of a camera is not just the price of the chip

biz-engineer · 08-27-2021, 01:54 AM - **1 Like**

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.

---------- Post added 27-08-21 at 11:04 ----------

Originally posted by pschlute

But the cost of a camera is not just the price of the chip

That's correct. If the price of the chip increase 40$, the price of the camera increases $400 due to profit margin, importer margin, retailer margin and VAT all being compounded multipliers of the initial cost increase.

**ramseybuckeye** · 08-27-2021, 02:16 AM - **1 Like**

Many manufacturers may have pricing contracts already in place for a certain amount of product in a certain time frame.

house · 08-27-2021, 03:34 AM

Curious to know how much of lens cost is chips. I can't imagine its very much at all. At least not Pentax lenses. There are reasonbly powerful chips in single use or otherwise throwaway products.

**southlander** · 08-27-2021, 05:03 AM - **1 Like**

There is an assumption here that TMSC manufacture the chips used by Pentax. That we don’t know. They are likely sourced from a number of manufacturers. The expensive chips will be in the camera and not lenses. Recent chip supply costs possibly may explain the relatively high cost of the K-3iii vs the K-1. The K-1 main processor chips were likely all manufactured some years ago at a contracted price and slowly been drawn down from inventory as cameras are assembled.

biz-engineer · 08-27-2021, 06:35 AM

Originally posted by beholder3

That turns a $2000 camera into a $2200-2400 camera.

Next FF models cost $3000 to $4000 , there is a lot of room inside that price to accommodate for the slightly more expensive chips.

vonBaloney · 08-27-2021, 08:43 AM

Originally posted by southlander

There is an assumption here that TMSC manufacture the chips used by Pentax.

Even if they don't, the places that do will be contracted (or possibly just forced) to make other more "important" chips than Pentax. The shortage is worldwide and will affect everything for which the chips are not already made and waiting to be assembled into a product. There is no way cellphones, cars, commercial needs, etc don't beat out consumer DSLRs and lenses for priority. (And if even they only were to need "stock" chips that everybody else uses also, they'd probably still find themselves last in line somehow.)

stevebrot · 08-27-2021, 09:32 AM - **3 Likes**

The sky is falling! The sky is falling!

All one has to do is read the news to know that. The most likely effect of the chip shortage, covid surge, and climate change, short term, is an interruption of Ricoh's manufacturing. Price increases in the supply chain? Meh...small concern.

Steve

biz-engineer · 08-27-2021, 11:43 AM - **2 Likes**

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...

**AggieDad** · 08-27-2021, 12:14 PM - **1 Like**

Originally posted by biz-engineer

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.

Go down!? Drop!? Hah! As you say, it just doesn't happen.

I grew up in the 40s and 50s. Today I mentally divide by 10 to compare a price to its 1960s counterpart. The overall change is about 9.25, but I find using a factor of 10 incredibly accurate for most of what I buy. On the other hand, my wife signed her first teaching contract in 1966 for about $4,700.

**cdd29** · 08-27-2021, 06:35 PM - **1 Like**

Just bought a bunch of new gear over the last few months so I should be good for awhile. When on my last buying binge I was warned by the salesman that prices on alot of stuff will be going up in the near future 9big surprise)

ebk · 08-28-2021, 01:22 AM

maybe it's time for a new pentax without any chips

**Rondec** · 08-28-2021, 02:38 AM

Inflation has been pretty bad this year, at least in the US. The Consumer Price Index rose by over 5 percent in June. I think camera gear is probably the least of our worries.

beholder3 · 08-28-2021, 04:17 AM

Originally posted by Rondec

Inflation has been pretty bad this year, at least in the US. The Consumer Price Index rose by over 5 percent in June. I think camera gear is probably the least of our worries.

To my understanding the US calculates its inflation rates very similar to the EU these days.
That does mean that for products like DSLRs the inflation is adjusted downwards for the value of the new features added in new successor products.
This again could mean that in the official statistics the price inflation of K-3 II versus K-3 III has not risen at all or even dropped...

Quote:

The hedonic quality adjustment method removes any price differential attributed to a change in quality by adding or subtracting the estimated value of that change from the price of the old item.

In other words: In markets with continuous technological advances the real world price growth for succesor products is systematically higher than the officially stated inflation (which is currently already pretty bad).

See: Quality Adjustment in the CPI : U.S. Bureau of Labor Statistics - RD012 is subject to "hedonic adjustments" of unknown quantities.

08-26-2021, 11:48 PM	#1
beholder3 Pentaxian Join Date: Dec 2011 Posts: 3,112	Expect significant price increases sneaking in across most products Quote: TSMC is the biggest chipmaker in the world and the company responsible for the processors used by Apple, AMD, Nvidia, Qualcomm, and even some Intel products. And its products are about to get a lot more expensive: the company plans to raise prices of its advanced chips by around 10 percent and less advanced products by about 20 percent TSMC is raising chip prices as supply shortages continue - The Verge With cameras (and more recently lenses) being little computers, this will not take too long. And it will be in addition to what already happened. That turns a $2000 camera into a $2200-2400 camera. With the mechanics of supply chain bottlenecks and empty shelves there might be more effects driving up prices even for older equipment. I guess the "wait to see the prices coming down" approach will need extra 2-3 years waiting time.

08-27-2021, 01:54 AM - 1 Like	#3
biz-engineer Pentaxian Join Date: Feb 2015 Photos: Gallery Posts: 12,245	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. ---------- Post added 27-08-21 at 11:04 ---------- Originally posted by pschlute But the cost of a camera is not just the price of the chip That's correct. If the price of the chip increase 40$, the price of the camera increases $400 due to profit margin, importer margin, retailer margin and VAT all being compounded multipliers of the initial cost increase. Last edited by biz-engineer; 08-27-2021 at 02:05 AM.

08-27-2021, 11:43 AM - 2 Likes	#10
biz-engineer Pentaxian Join Date: Feb 2015 Photos: Gallery Posts: 12,245	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... Last edited by biz-engineer; 08-28-2021 at 12:23 AM.

08-27-2021, 12:14 PM - 1 Like	#11
AggieDad Site Supporter Join Date: Jan 2015 Location: Houston, TX Photos: Gallery \| Albums Posts: 1,456	Originally posted by biz-engineer 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. Go down!? Drop!? Hah! As you say, it just doesn't happen. I grew up in the 40s and 50s. Today I mentally divide by 10 to compare a price to its 1960s counterpart. The overall change is about 9.25, but I find using a factor of 10 incredibly accurate for most of what I buy. On the other hand, my wife signed her first teaching contract in 1966 for about $4,700. Last edited by AggieDad; 08-27-2021 at 05:05 PM.

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08-27-2021, 01:04 AM - 3 Likes	#2
pschlute Moderator Loyal Site Supporter Join Date: Mar 2007 Location: Surrey, UK Photos: Gallery Posts: 8,212	Originally posted by beholder3 That turns a $2000 camera into a $2200-2400 camera. But the cost of a camera is not just the price of the chip

08-27-2021, 02:16 AM - 1 Like	#4
ramseybuckeye Site Supporter Join Date: Apr 2009 Location: Hampstead, NC Photos: Gallery Posts: 17,295	Many manufacturers may have pricing contracts already in place for a certain amount of product in a certain time frame.

08-27-2021, 03:34 AM	#5
house Pentaxian Join Date: May 2015 Photos: Albums Posts: 3,306	Curious to know how much of lens cost is chips. I can't imagine its very much at all. At least not Pentax lenses. There are reasonbly powerful chips in single use or otherwise throwaway products.

08-27-2021, 05:03 AM - 1 Like	#6
southlander Site Supporter Join Date: May 2012 Location: Adelaide Photos: Gallery \| Albums Posts: 1,364	There is an assumption here that TMSC manufacture the chips used by Pentax. That we don’t know. They are likely sourced from a number of manufacturers. The expensive chips will be in the camera and not lenses. Recent chip supply costs possibly may explain the relatively high cost of the K-3iii vs the K-1. The K-1 main processor chips were likely all manufactured some years ago at a contracted price and slowly been drawn down from inventory as cameras are assembled.

08-27-2021, 06:35 AM	#7
biz-engineer Pentaxian Join Date: Feb 2015 Photos: Gallery Posts: 12,245	Originally posted by beholder3 That turns a $2000 camera into a $2200-2400 camera. Next FF models cost $3000 to $4000 , there is a lot of room inside that price to accommodate for the slightly more expensive chips.

08-27-2021, 08:43 AM	#8
vonBaloney Pentaxian Join Date: Oct 2011 Location: Albuquerque, NM Posts: 6,029	Originally posted by southlander There is an assumption here that TMSC manufacture the chips used by Pentax. Even if they don't, the places that do will be contracted (or possibly just forced) to make other more "important" chips than Pentax. The shortage is worldwide and will affect everything for which the chips are not already made and waiting to be assembled into a product. There is no way cellphones, cars, commercial needs, etc don't beat out consumer DSLRs and lenses for priority. (And if even they only were to need "stock" chips that everybody else uses also, they'd probably still find themselves last in line somehow.)

08-27-2021, 09:32 AM - 3 Likes	#9
stevebrot Otis Memorial Pentaxian Join Date: Mar 2007 Location: Vancouver (USA) Photos: Gallery \| Albums Posts: 42,007	The sky is falling! The sky is falling! All one has to do is read the news to know that. The most likely effect of the chip shortage, covid surge, and climate change, short term, is an interruption of Ricoh's manufacturing. Price increases in the supply chain? Meh...small concern. Steve

08-27-2021, 06:35 PM - 1 Like	#12
cdd29 Loyal Site Supporter Join Date: Sep 2016 Location: Southern Indiana Photos: Gallery Posts: 963	Just bought a bunch of new gear over the last few months so I should be good for awhile. When on my last buying binge I was warned by the salesman that prices on alot of stuff will be going up in the near future 9big surprise)

08-28-2021, 01:22 AM	#13
ebk Loyal Site Supporter Join Date: Aug 2011 Location: Utrecht Posts: 148	maybe it's time for a new pentax without any chips

08-28-2021, 02:38 AM	#14
Rondec Loyal Site Supporter Join Date: Mar 2009 Location: Gladys, Virginia Photos: Gallery Posts: 27,663	Inflation has been pretty bad this year, at least in the US. The Consumer Price Index rose by over 5 percent in June. I think camera gear is probably the least of our worries.

08-28-2021, 04:17 AM	#15
beholder3 Pentaxian Join Date: Dec 2011 Posts: 3,112 Original Poster	Originally posted by Rondec Inflation has been pretty bad this year, at least in the US. The Consumer Price Index rose by over 5 percent in June. I think camera gear is probably the least of our worries. To my understanding the US calculates its inflation rates very similar to the EU these days. That does mean that for products like DSLRs the inflation is adjusted downwards for the value of the new features added in new successor products. This again could mean that in the official statistics the price inflation of K-3 II versus K-3 III has not risen at all or even dropped... Quote: The hedonic quality adjustment method removes any price differential attributed to a change in quality by adding or subtracting the estimated value of that change from the price of the old item. In other words: In markets with continuous technological advances the real world price growth for succesor products is systematically higher than the officially stated inflation (which is currently already pretty bad). See: Quality Adjustment in the CPI : U.S. Bureau of Labor Statistics - RD012 is subject to "hedonic adjustments" of unknown quantities.