Page 61 - Plastics News - April 2026
P. 61
BUSINESS NEWS
ELECTRONICS COMPANIES STOCKPILE AMID RISING
INPUT COSTS AND SUPPLY CHAIN UNCERTAINTY
ompanies are building inventories of Electronics firms are also adding 15-20 days of
memory chips and crude-linked deriva- extra plastic inventory after prices jumped about
Ctives such as plastics amid persistent 30% in the last quarter, driven by higher crude oil
price increases and supply uncertainties. This is prices following the Gulf conflict. However, sup-
in deviation to the usual practice where supplies ply remains constrained, with companies press-
are mostly linked to actual demand, except dur- ing vendors for additional volumes.
ing peak buying season like Diwali.
"We are buying whatever memory chips we can
get and placing extra orders," Said Satish NS,
president at TV and appliance maker Haier India.
"Plastic is harder to stock due to warehousing
constraints, but we are still adding 10-15 days of
extra inventory."
The industry is grappling with a 1.8-2x surge in
memory chip prices over the past six months,
along with erratic supplies, as a large share is
being diverted to artificial intelligence data cen-
tres and infrastructure. Memory chips are key
components in smartphones, televisions and
laptops.
Consumer electronics and smartphone makers Tarun Pathak, research director at Counterpoint,
are stockpiling key inputs and finished goods said smartphone brands are procuring whatev-
well beyond their normal inventory cycles as ris- er inventory and components they are getting
ing input costs force record price hikes.
as component prices , especially memory, and
According to marktracker Counterpoint Re- depreciating rupee is becoming difficult to navi-
search, smartphone shipments rose about 20% gate every quarter. He said the overall commod-
month-on-month in March despite a nearly 10% ity outlook is also very volatile.
drop in sales, indicating inventory build-up at Industry executives said suppliers are unable to
current price levels. Shipments have exceeded fully meet demand.
sales over the past quarter even as the market
contracted by more than 9%, with stocking run- "We are able to build 15-20 days of additional
ning 2-3 percentage points higher than actual inventory; beyond that, suppliers are not fulfill-
sales. ing orders as they want to avoid hoarding," said
April 2026 PLASTICS NEWS 63
