CRI Feeling Chip Shortage; Big Rollouts Delayed
May 18, 2021 by Dave Haynes
When I put out a request for reader insights about the global chip shortage and the impacts on businesses, I maybe should not have been surprised by the lack of response.
I had a few who were willing to share, but only off the record. It’s one of those debates many companies are probably having about being transparent about news that’s probably bad and definitely uncertain.
But some companies have to talk about it, because they’re publicly-traded. Like Creative Realities, which just had its Q1 earnings call.
CEO Rick Mills actually brings up the situation:
There is one industry issue that we need to discuss on this call. We are beginning to experience and expect to be impacted by the global shortage and supply chain challenges for semiconductor chips. We expect these short-term supply issues to affect us for the next two quarters at a minimum. This shortage is impacting the supply of screens and related player hardware from every manufacturer. And as all of us on this call, we’ve all heard it across the industry, the automotive industry, many industries are suffering the shortage.
The following is a quote from one of the principal analysts at the Gartner Group. And the quote is as follows: “the semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021. Foundries are increasing wafer prices, and in turn chip companies are increasing device prices.”
Displays and players are a key component of our digital systems. Currently, we have customer purchase orders in hand for 2,000 plus systems. Now, a system in our world, in our business is inclusive of a screen, a player and a mounting system or mounting device. We do not believe we will be able to deliver these 2,000 systems in Q2 as a direct result of the supply shortages. In addition, we have visibility into future orders for another 6,000 plus systems. Again, a system consists of a screen, a player and a mounting device that we will be managing with our suppliers to achieve delivery throughout the balance of this year.
I want to emphasize that we are not losing orders due to this supply chain disruption, as every competitor has the same issue. Instead, we are seeing a delay in our ability to deliver, which will impact the timing of revenue recognition on these orders.
Definite chip shortages affecting media players, all-in-one computers from what I have seen. Affecting Dell and other companies.