Memory component shortages are forcing hardware manufacturers to raise prices, which will compress margins and increase costs for Google's device business.
Too little corroboration in the last 3 days to call a trend (2 articles). Watching for it to gain traction.
Memory component shortages are forcing hardware manufacturers to raise prices, which will increase costs throughout the supply chain. The shortage is compressing margins for device manufacturers and raising input costs for companies dependent on memory-intensive hardware.
Supply-side cost pressures on hardware components create margin compression risk for device businesses and increase the relative attractiveness of software and services; investors use component pricing trends as leading indicators of profitability headwinds.
"Broadcom shares fell 4% Wednesday after its chief rival, Marvell Technology, announced an expansive partnership with Alphabet's Google, its flagship custom-chip customer. The deal validated concerns that Google will increasingly diversify its suppliers."
"Osterloh said the squeeze is forcing consumer electronics companies to raise prices and indicated Google expects additional pressure on its own devices. 'What's happening in the near term, I think, is everyone's needing to raise their prices. We've also discussed that we will need to raise ours, like all the other industry players.'"