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Ukraine conflict could mean over 100m lost device sales

Staff Reporter
April 4, 2022

Semiconductors may be impacted if there are neon shortages

Russia’s invasion of Ukraine could cost the global mobile phone market more than 100 million units of lost sales this year.

So says top CCS Insight analyst Marina Koytcheva, who estimates that mobile phone shipments will total 1.63 billion this year – just three per cent higher than last year and still ten per cent lower than the last pre- pandemic year of 2019.

Of those, 1.38 billion units will be smartphones, an increase of four per cent from 2021 but still two per cent lower than in 2019.

Targets affected

Nikkei Asia has reported that Apple already told suppliers that the Ukraine conflict has hit its iPhone SE targets and that manufacturing of the device will be cut by 20 per cent, in signs of dents to consumer demand.

“We are watching carefully the potential risk for the shortage of purified neon, which is used in semiconductor manufacturing and for which Ukraine is a major global supplier,” adds Koytcheva.

“Supplies have already been disrupted, but the industry has a cushion: it has stock and can recycle and reuse neon to an extent. “However, if the war continues for a long time and the industry doesn’t find an alternative, we could see an impact on the industries that use semiconductors.

“The mobile phone industry is unlikely to be the first to be affected, due to its importance to suppliers – but the longer the war continues, the higher the risk.”

PP Foresight TMT analyst Paolo Pescatore added: “Tech, media and telco industries have had to navigate their way around significant restrictions during the pandemic, in which we’ve seen numerous new consumer electronic devices, including flagship smartphones, launch into the market – while telcos have continued to increase their next- generation networks.

“Planning and sourcing from different suppliers remains critical in keeping up with demand for devices or networking products for 5G and fibre rollouts.”

Samsung and Apple have both suspended product shipments to Russia.

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