Question 1
Samsung Electronics Co. Ltd said on Thursday it expects chip shortages to affect chip demand from some customers in the final three months of the year, after reporting its highest quarterly profit in three years.The warning comes as producers of goods from televisions to cars have faced a host of supply chain issues ranging from a shortage of logic chip parts, manpower shortages, logistics snarls, and delays at parts plants due to power cuts in China.
Samsung said demand for server DRAM chips, which temporarily save data, and NAND flash chips that serve the data storage market, is expected to stay robust in the fourth quarter due to expansion of data centre investments. Although supply chain issues could limit demand from some mobile chip customers in the fourth quarter, demand for server and personal computer chips is expected to be robust in 2022 despite uncertainties, it said.
Analysts expect Samsung's fourth quarter earnings to be level or below its third quarter result, largely depending on memory chip prices.Smaller rival SK Hynix on Tuesday struck a more optimistic note than U.S. peers and forecast steady demand for memory chips.
Illustrate and explain how the shortage of chips will impact the market for (i) chips and (ii) motor vehicles.
Is demand for(i) chips and (ii) motor vehicles elastic or price inelastic? Explain your reasoning.
Discuss one factor
EACH
that you think influence elasticity of demand and supply for chips. Provide examples
Explain how revenue for the producers of(i) chips and (ii) motor vehicleswill be impacted by the shortage in chips.