After hitting carmakers like Tesla and Sony’s PlayStation 5, chip shortages have now spread to China’s vast home appliances industry

A global shortage in semiconductors, which has already disrupted manufacturing at carmakers like Tesla and production of Sony’s PlayStation 5 game consoles, has now spread to China’s vast home appliances sector, according to industry giant Midea Group.

Manufacturers’ supply of chips is “under pressure in the home appliances industry”, said Midea in a statement to the South China Morning Post on Thursday. Midea, with a market cap of about 600 billion yuan (US$91.7 billion), is the world’s largest manufacturer of consumer appliances, including refrigerators, washing machines and air conditioners.

Headquartered in Foshan, a city in southern Guangdong province, Midea said the prices of chips used for home appliances, which are generally less sophisticated than those used in smartphones and laptop computers, are poised to increase as the global shortfall of chips persists.

Disruptions in production at China’s home appliances industry could potentially have a negative impact on the global market for these products. China produces about two-thirds of the world’s air conditioners, televisions and microwave ovens, and about half of refrigerators and washing machines, according to data from the China Household Electrical Appliances Association.

While the impact of chip shortages in China’s home appliances sector is currently hard to quantify, manufacturers’ plans are likely to change so they can adapt to rising costs or decreased availability of these components, which are used to make products “smarter”, typically requiring an internet connection.