Bloomberg: High memory costs impacting Canon sales

GaryPageau , ,
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Bloomberg reports the on-going computer chip and memory shortage is going to cost Japanese camera leader Canon Inc. an additional ¥50 billion ($313 million) to its annual costs. As a result, the company lowered its operating income forecast by 5% to ¥456 billion. The company hasn’t yet incorporated the impact from the conflict in the Middle East beyond May.

The change in the outlook highlights the impact on skyrocketing memory prices are having on the consumer electronics industry. Booming demand in the AI market – and data centers in particular – has driven prices up, affecting every other area of consumer electronics that requires chips, including smartphones, cameras, and laptops. The average selling price of DRAM climbed 60.8% in the first quarter.
According to the article, Canon plans to offset some of the higher costs with price hikes, but will need to absorb some of the pain, said Minoru Asada, head of finance and accounting. The company also cut its outlook despite its expectations of surging demand from memory makers for its lithography machines.
“The impact assumption for DRAM/NAND cost increases deteriorated significantly” from Canon’s earlier estimate, Citigroup analyst Masahiro Shibano said in a note. “We get little sense that the bad news is exhausted.”

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Gary Pageau is principal of InfoCircle LLC, continuing his marketing communications career. InfoCircle LLC is a marketing and communications consulting firm, specializing in business-to-business markets. For nearly 25 years, he was with PMA International, serving most recently as Publisher, Content Development and Strategic Initiatives. His primary responsibilities included overseeing the Association’s editorial department, marketing research unit, education and corporate relations department.