A production shortage is causing the price of chips used in head units, dashcams, ADAS and other electronics to rise by about 10 to 20 percent.
Some suppliers are absorbing the cost for now but say they will raise prices in the future if the chip costs continue to rise.
The chip shortage and resulting price rise is due to the large amount of memory needed by AI data centers. Companies such as NVIDIA and Samsung are switching their production to high bandwidth memory called HBM required by AI servers, leaving less production available for traditional DDR memory used in consumer electronics, reports CNBC and car audio suppliers.
Not only must electronics suppliers pay more for the chips, but they receive lower quantities, said one supplier. “Even though we pay more money we don’t get as many chips, it’s going to the AI servers.”
Dashcams, rear view mirrors with built in DVRs, some blind spot systems, “anything to do with a recording camera” is impacted by the chip shortage, he continued. SD cards are harder to find and more expensive. One supplier speculated that the industry might move away from SD cards in dashcams in favor of the old built-in hard disc memory.
One head unit supplier said its new models are higher in price and shipments have been delayed for three months due to chip shortages.
Ronnie Brashear of Epsilon (Soundstream, Power Acoustik and Precision Power) said, “The chip prices increased by 10 to 12 percent for the RAM we use in our Slingshot and Harley radios. If chips were $50, they are now $55. We’re not passing on the cost yet, but if it keeps going up, we’ll have to raise the price. That’s a $20 increase at retail if we are keeping dealer profits steady.”
A prominent dashcam retailer, Ben DelGrosso of Safe Drive Solutions of Canada is stocking up on SD cards for use in dashcams due to the shortages. “We just ordered 500 SD cards and we already had over 200 in stock. That should last us most of the year,” he said. Currently Safe Drive Solutions ships its dashcams with only 65GB SD cards and it has suspended sales of standalone SD cards. The wholesale price of one of the SD cards it sells rose 42 percent and another SD card type rose 33 percent. As a result, Delgrosso believes we’ll see price increases on dashcams starting in March. “Manufacturers are starting to say, ‘We’ve absorbed costs as long as we can.’”
