Chip shortage threatens mattresses: Sleep Number production suffering
There's a new reason to lose sleep over the chip shortage. Sleep Number's mattress production capacity is plunging as lockdowns in Shanghai further slow the output of semiconductors needed to make the company's high-tech beds.
Why it matters: Our need for chips goes far beyond phones and cars, making us vulnerable to hiccups in the supply chain.
- “When we think about chips, we think about supercomputers and servers and PCs — and the pandemic finally brought to light that almost everything runs on semiconductors: our ovens, refrigerators, the lights in our home,” Daniel Newman, principal analyst at Futurum Research, tells Axios.
Threat level: COVID-related lockdowns in China pose another threat to chip availability, which is largely concentrated outside the U.S.
- Sleep Number said it expects its weekly supply of chips to plunge by about 50% by the end of the second quarter, constricting its ability to make its “smart beds.”
- For example, the crisis poses a threat to production of the FlexFit 3 Smart Base, a $2,399-to-$4,199 adjustable bed that enables sleepers to use their smartphones to activate under-bed lighting and foot warming.
The big picture: Chipmakers, spurred on by the Biden administration and a bipartisan push on Capitol Hill, have announced around $80 billion in investments in U.S. manufacturing since the start of 2021, according to the White House.
Yes, but: Most of those plants won’t come online for a few years. Until then, companies facing shortages are expected to continue raising prices to make up for their lost sales volume, contributing to our inflation crisis.
- “With demand more than supply, we’ve had a lot of inflation” in mattresses, Jerry Epperson, a mattress industry researcher and managing director of Mann, Armistead & Epperson, tells Axios. “Everybody’s had shortages.”
What we’re watching: How much prices increase.