Raspberry Pi price to increase for the first time ever due to chip shortage

zakislam

Posts: 52   +1
Why it matters: It seems nothing is safe from the chip shortage, not even one of the cheapest computer systems on the market. For the first time since it was released, the price for a Raspberry Pi board will be going up.

In February 2020, the Raspberry Pi Foundation announced it would discontinue the 1GB Raspberry Pi 4, while the 2GB variant would permanently drop from $45 to $35. Due to global supply chain issues and the shortage of semiconductors, the 2GB Raspberry Pi 4 will now return to its original $45 price point. The product is simply not "currently economically viable" at the reduced cost.

Although there's been "significantly increased demand" for its boards, Raspberry Pi will ultimately manufacture around seven million units in 2021, which would be level with the shipment volume during 2020. The shortages have predominantly affected both the Raspberry Pi Zero and the 2GB variant of Raspberry Pi 4.

Eben Upton, the CEO of Raspberry Pi, stressed the uptick in price is only a temporary measure, and once supply chain issues ease, pricing will revert back to $35. Out of all their single-board computers, only the 2GB Raspberry Pi 4 model will cost more in the meanwhile.

Catering to their industrial customers who have incorporated the 2GB version of Raspberry Pi 4 into their products, the previously discontinued 1GB variant will be reintroduced for $35.

Raspberry Pi expects the supply chain challenges it's facing will remain through much of 2022, with these obstacles mostly impacting their older systems built on 40nm silicon. As such, products that will be prioritized in the allocation of limited stocks of 40nm silicon are the Compute Module 3, Compute Module 3+, and Raspberry Pi 3B.

"The good news is that we've been able to hold the line on pricing for all but one of our products; that we expect to have enough 28nm silicon over the next twelve months to support both our existing Raspberry Pi 4 and Compute Module 4 customers, and customers migrating from Raspberry Pi 3B+; and that we see early signs that the supply chain situation is starting to ease," Upton added.

The chip shortage and bottlenecked supply chains have affected all facets of the technology industry. The PC market, graphics cards, gaming consoles, and even the automotive market have all been damaged.

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Dimitriid

Posts: 1,311   +2,557
Eben Upton, the CEO of Raspberry Pi, stressed the uptick in price is only a temporary measure, and once supply chain issues ease, pricing will revert back to $35.

I maintain that supply chain issues will simply not ease, not in 2022 or 2023, not ever: It's far too profitable to just go back and nobody seems to be either willing and/or able to do anything about it.

I understand the sentiments but he's basically trying to predict an unpredictable saying he will be able to return pricing back to normal: even if nodes become more efficient the "supply chain issues" might continue for so long that by the time a low priority and low margin product like the raspberry pi can be ramped up simple inlfation would have caught up with the new price.
 

Bl00dyMinded

Posts: 375   +538
I maintain that supply chain issues will simply not ease, not in 2022 or 2023, not ever: It's far too profitable to just go back and nobody seems to be either willing and/or able to do anything about it.

I understand the sentiments but he's basically trying to predict an unpredictable saying he will be able to return pricing back to normal: even if nodes become more efficient the "supply chain issues" might continue for so long that by the time a low priority and low margin product like the raspberry pi can be ramped up simple inlfation would have caught up with the new price.
100% agree with you. Right now it's the shortage... Next year it will be the Greed from these companies and the numbers they saw. Welcome to capitalism.
 

Markoni35

Posts: 1,318   +534
I maintain that supply chain issues will simply not ease, not in 2022 or 2023, not ever: It's far too profitable to just go back and nobody seems to be either willing and/or able to do anything about it.

We had similar situations before. There were RAM shortages, graphics card shortages (like now), oil shortages, food shortages (like now), and eventually they all ended.

If you maintain the prices too high for a long time, what happens? Well, competition happens. They start building their own factories of whichever goods are too expensive. Counting that prices will stay that high. The best way to undermine the competition is to lower the prices before they start building their facilities/factories. Or in the middle of construction.

Then their motivation will deflate, as now they can't hope to return their investment that soon. Otherwise, they will finish their factories and become competition. Which will almost certainly start bringing prices down.

If not, then another competitor will join the train. Capital moves to industries that earn mucho dinero. The only way to discourage them is to lower the prices.
 

Dimitriid

Posts: 1,311   +2,557
We had similar situations before. There were RAM shortages, graphics card shortages (like now), oil shortages, food shortages (like now), and eventually they all ended.

If you maintain the prices too high for a long time, what happens? Well, competition happens. They start building their own factories of whichever goods are too expensive. Counting that prices will stay that high. The best way to undermine the competition is to lower the prices before they start building their facilities/factories. Or in the middle of construction.

Then their motivation will deflate, as now they can't hope to return their investment that soon. Otherwise, they will finish their factories and become competition. Which will almost certainly start bringing prices down.

If not, then another competitor will join the train. Capital moves to industries that earn mucho dinero. The only way to discourage them is to lower the prices.
We did have those situations before but it's specially funny to me that you bring up the RAM shortages as it was found that those companies were guilty of price fixing.

The difference is that since ram is not really built-to-order and works as a commodity instead, it was much easier to show price fixing from a legal stand point and proceed accordingly, like it happened numerous times before.

But processors are not commodities: they're actually *are* built to order and their distribution is entirely in charge of whomever is placing the orders: Samsung, Apple, AMD, Nvidia, Qualcomm, intel, etc.

So because those are built-to-order there naturally are contracts in place. Contracts always carry NDAs with them and no one company is entitled, under normal circumstances, to take a look at the orders from their competitors, the volumes they got, the prices they got for their allocation, etc.

Basically I don't think you can easily show there's deliberate price fixing without changing the law to force forges to disclose everything and well you can rest assured forges would fight that and very likely win. This kind of issue would probably require legislation to step in as in commodities and made-to-order products are legally distinct and we just never foresaw the market getting so specialized and narrow that made-to-order products could start behaving and henceforth being vulnerable to the same type of otherwise illegal market manipulation.
 
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jdwii

Posts: 19   +25
World needs to do something so this never happens again we need more companies then 4 making every chip
 

Lounds

Posts: 955   +858
Continental manufacturing should return, this global distribution of parts isn't sustainable. Most western economies have been too reliant on the cheap labour of China. Before the raise of China as a global manufacturing power house, how many Billionaires were there in the world?