‘It’s back to COVID’: prices of electronics likely to rise
Retailers say shipping costs have already increased up to 20 per cent
An increase in the costs of shipping and raw materials caused by the ongoing war in Iran, coupled with the hardware demands of the global AI boom, is leading electronics retailers in Malta to brace for higher prices of devices and components.
After the US and Israel launched air strikes against Iran on February, Teheran retaliated by blockading the Strait of Hormuz, a vital shipping route through which 20 per cent of the world’s seaborne oil trade and about a fifth of global liquefied natural gas (LNG) pass.
Around 84 per cent of the oil flowing through the Strait of Hormuz heads to Asia, fuelling electronics factories there and serving as raw material for vital components like plastics, circuit boards and semiconductor production aids. Moreover, Qatar’s halt on helium exports from its LNG operations – supplying about 30 per cent of global needs – has also doubled prices for this gas essential to chip manufacturing.
Paul Mercieca, CEO of electronics chain Intercomp, said the impact of the conflict is already being felt in logistics, with several shipping companies announcing price increases effective immediately.
“The longer-term effects have yet to fully materialise but upward pressure on manufacturer pricing is anticipated as rising oil costs work their way through the supply chain,” he said.
Mercieca noted that, as costs continue to rise, consumers will begin to feel the effect at the point of sale once existing stock is exhausted and higher-cost inventory reaches the shelves. “Some manufacturers have already adjusted their pricing upward by 10 to 20 per cent on certain product lines.”
God forbid prices go down, we’ll be stuck with expensive stock
He said: “This trend began emerging in the latter part of Q4 last year and has continued month-on-month, creating real procurement difficulties for end customers whose annual budgets were set before these sharp increases took hold.”
Marco Manicolo, head of sales at Merlin Computers Ltd, which mainly supplies IT hardware to business clients, said shipping costs had gone up by 20 per cent due to rerouting, increased container prices and costlier insurance.
“It feels like we’re back in COVID times. We import ASUS computers, which are produced in Taiwan and Singapore, so we’re being impacted directly,” he said, adding that ASUS did not project prices to go back down during the rest of 2026.
Manicolo said that, due to the spike in components costs, a laptop which previously cost his company €700 to import now costs €1,200 as a wholesale price from suppliers, even before shipping charges are added. “It’s unbelievable. God forbid prices go down because we’ll be stuck with expensive stock,” he said.
The war is exacerbating inflation caused by the boom in AI. Data centres powering AI worldwide are hoarding semiconductors, energy and metals at unprecedented rates – consuming electricity equivalent to entire countries – driving up component prices even before war disruptions hit.