The shortage of semiconductor chips in the market has created new opportunities for the printing channel.
The global shortage of semiconductor chips will persist until mid-2023. This was driven by the Covid-19 pandemic that has led to increased demand for smartphones, laptops, printers and tablets to support remote work, as well as consumer demand for home technology. This has been joined by massive new demands for chips, most notably the automotive industry. All this has put immense pressure on factories, leading to demand outstripping supply.
According to data from the Semiconductor Industry Association (SIA), global semiconductor sales were $45.4 billion in the month of July 2021, a 29% increase over the July 2020 total.
This upward trend is likely to continue due to ongoing post-pandemic digitization, 5G and WiFi 6 upgrade cycles to the wireless market, and the need for more advanced chips for applications such as AI and machine learning along with cloud computing. The continued rapid growth of Internet of Things (IoT) devices is a heavy burden on the chip market struggling to return to full supply capabilities.
The printing industry has already been hampered by office closures that have seen print volumes decline significantly. Chip shortages are creating more uncertainty in the market, with many OEMs reporting the impact on their financial statements. Like many industries, print manufacturers have been using alternative supply routes and re-engineering devices to meet customer needs. Beyond chip shortages, the industry also faces challenges related to material availability, labor shortages, blockages and logistics.
Limited chip supplies are putting pressure on margins and, predictably, prices are rising; according to The Wall Street Journal , printer prices have increased more than 20% in a year.
In an already challenging business landscape, how can MPS and print material suppliers in general best handle supply chain disruption?
As some workers return to the office, organizations may be looking to change the size and type of their printer fleets to support a more flexible, hybrid workforce (meaning one that works from both the office and home). Hence, extending current MPS contracts can only be a short-term solution.
There is always a risk that, as companies evaluate the office space they need, lower print volumes on fewer devices will become the new reality. To this must also be added the need for printing by home workers, without which the productivity of some jobs is being seriously affected.
However, the industry has long needed to transform into something that goes beyond the change of equipment. The chip shortage should be seen as an excellent opportunity to consider how to build value-added solutions and services around hardware that can pave the way for customer relationships focused on higher-value service over the long term. This is also driven by the growing demand for sustainable solutions, including the use of equipment based on its functional life (and not on contractual criteria or other whims).
In these times of scarcity, we are experiencing a boom of companies offering refurbished equipment. While their opportunity is based on the simple fact of having stock to meet a demand, it should not escape our attention that the incorporation of this equipment in a company favors the fulfillment of its sustainability objectives. Consequently, those MPS companies must learn to manage the growing value of having printing resources in a market where demand far outstrips supply.
Moving print to the cloud is another opportunity for the industry. It allows the company to minimize dependence on new print servers and its benefits go beyond hardware. A cloud print infrastructure minimizes the IT burden, reduces costs (financial and environmental) and can help an organization better manage and monitor print security.
The new organization of work in a hybrid environment brings the opportunity to sell work-from-home specific equipment and in turn the opportunity to manage their needs along with that of office-based equipment. Only by demonstrating to the customer company that telecommuting printers are under the same tight cost control will they agree to provide remote printers to the workstations that need them. Clearly, this is possible with Nubeprint’s distributed monitoring ecosystem that can be activated from the teleworker’s smartphone.
Sustainability in printing is also a factor that creates new opportunities around printers (extending their useful life) and consumables (facilitating their circular economy). Some legislations already recognize this. Italy, France and the Balearic Islands (Spain) have been the pioneers. But many other countries are preparing their legislation. And practically all major companies include it in their Sustainability, Social and Corporate Governance (ESG) objectives.
Source:SIA, RTM World, Nubeprint