- Expert advice
The Global Microchip Shortage is Affecting Our Ability to Build
Crisis & Demand
We Have Extremely Limited Inventory Available.
Once We Sell Out, It Will Be 2 Years Before We Have More!
Once We Sell Out, It Will Be 2 Years Before We Have More!
Crisis is Here...
The MagikFlame Insert is a hi-tech product. We use microchips to create the holographic projection technology that sets our fireplaces apart from everything else (in terms of realism). We rely on microchips to produce our photo-realistic flames and right now we are in the midst of a global microchip supply crisis. Simply put, there are not enough microchips to go around. This situation is affecting many manufacturers like the automotive industry, video game consoles, and consumer electronics to name a few. Our vendors have told us that it can be up to two years before we receive the crucial microchips we need to build more MagikFlame electric fireplaces!
Entire industries are battling to get their hands on the same limited supplies, further driving up prices as demand outweighs supply by a wide margin. We are selling through our available inventory of inserts/mantels quickly, and after that it will be a long while, possibly years, before we have more. Products that are listed as “in-stock” can ship in as little as 24-48 hours while supplies last.
There is a Severe Shortage of These
How The Global Chip Shortage Started (Video Courtesy of ColdFusion)
High Demand & Low Availability
There are not enough MagikFlame fireplaces for all of our customer demand this season. This is due to the lack of crucial microchips — globally — and everyone is fighting over the miniscule supply. There are even limits in place to prevent “hoarding” which makes it very difficult for manufacturers to purchase at the levels we require to meet demand. Once we sell out of our existing very limited inventory of MagikFlame Inserts, it will be up to two years before we can get more microchips to get back to building. That means that once we sell out you will not be able to buy a MagikFlame for a very long time. Once we sell out we will not have more MagikFlame electric fireplaces for the foreseeable future. If you are considering a MagikFlame for your home or business this season, or anytime soon, we would highly recommend you order now. The prices right now are the lowest of the year (and not getting lower). Once we run out of fireplaces that’s going to be it for quite some time. This is a fact we can not avoid despite our best efforts.
Global Computer Chip Shortage Could Last for Years (Video Courtesy of CBS Mornings)
Browse Our Thin Inventory
Rising Fuel Prices
The situation in Europe and the coming winter is taxing an already overloaded and fragile ecosystem related to fuel. Simply put there is more demand than there is supply and that is severely driving up the cost of fuel around the world. This means that components that are required to build the MagikFlame fireplace are going up considerably. Now it costs more to transport those same components than ever before. Due to the war in Ukraine, the Black Sea is closed to cargo vessels. This means that freight vessels are forced to take alternative routes. In turn, doubling the transit time from some overseas countries. Therefore, making parts even harder to get and much more expensive. What used to take 25-30 days can now take 60 days or more. The cost to transport components, goods, and products domestically is also increasing significantly due to the rising fuel costs and lack of drivers/trucks in the United States.
For a Sale
That Won’t Come
Many may be expecting doorbuster deals or 50% off Black Friday promotions and other incentives. The reality is that it will not be happening this year or anytime in the near future. The cost for all of our components have gone up significantly. They are going up because of inflation, rising fuel costs, but also lack of availability of crucial components like microchips, further exacerbated by disputes with Asian countries namely, China. This is affecting raw material costs in a significant way and coupled with over-demand means less supply and higher costs. There are import duties of 25% or more on parts imported from Asia that are required to build the MagikFlame fireplaces. Even though we do our best to build as much as we can in America, we’re not big enough to produce our own microchips. This is done only by specialized companies with billions of dollars of investment in technology and know-how. With the political tensions between the United States and China that’s only driving prices up, combined with the fear of potential invasion of Taiwan by China, which is the largest producer of microchips — the future is bleak. MagikFlame can not hold today’s prices much longer as we have been battling to maintain our current pricing despite massive increases in costs in 2021-2022. Domestic microchip production is many years off, and will not off-set the global supply shortages anytime soon.
Lack of Skilled Labor
The cost of labor in the United States has gone up, the lack of skilled workers has gone down, and quite frankly everything costs 5-10 times more to build this year than it did just a couple years ago. If you are holding out for some tremendous savings in the coming months, that is not going to happen. The current economic and world situation is making further discounts impossible. Our fireplaces cost more to build because they are built in America, and use hi-tech components that are increasingly difficult and expensive to obtain. To be blunt, even putting a MagikFlame in your home right now is a small miracle, with a tremendous amount of effort going into building every single product that goes out the door. Each MagikFlame takes up to four weeks to build by hand in Nashville, as we do not use automated robots or poorly compensated global labor. Winter is quickly approaching and demand is continuing to rise beyond our capacity to build. There is no advantage to waiting for a sale or larger promotion that will not come. We suggest ordering today as we will quickly sell out. There is not enough product on-hand for everyone.
Besides availability issues concerning our high-tech 28” Insert, we are also having major challenges with manufacturing and importing our wood mantel surrounds from our global suppliers. Most of the wood that is used in Asia to produce our mantels comes from Russia. The current Russian/Ukrainian war contributes to lack of supply availability. Raw materials are becoming much more difficult to source because of rising fuel prices in combination with the war and political tensions with both Russia and China. Currently, we are transitioning away from Asian manufacturing partners to other parts of the world. However, as we change regions of origin, it means that we are going to be running out of mantels before more are delivered from our new suppliers who have just recently come on board and are in the early processes of engineering. For now this means an extreme lack of availability for all mantel packages. You may see on our website that we are sold out of a few or more of our best sellers, and we’re quickly running out of supplies of the remaining models. Our mantel inventory is not going to hold out this season, and our new mantel manufacturers are not going to be able to deliver quick enough to get a mantel package in your hands this winter, and possibly even into Q2 2023. There is no advantage to waiting if you want a MagikFlame anytime soon. If there is a specific mantel package that you want, we recommend that you pre-order it now, as we only have a very limited supply coming in (Trinity and Artemis are currently in route) but once those replacements sell out, it’s going to be a very long time before our new vendor is able to deliver additional products.
Stock Shortages Out of Our Control
We are doing our absolute best to keep everything in stock, but right now there are so many real world factors that are affecting the availability of our products, and many things are simply out of our control. We are a small family business struggling to operate in a strange new world. If you want a MagikFlame for the Holidays, pick the one you want, and get your order placed as soon as you can for delivery in a reasonable time — or don’t expect a MagikFlame in your home anytime soon. We are different from other manufacturers, and we are being fully transparent so that you can make an informed decision, because unless you are in manufacturing, much of the topics mentioned in this post are not common knowledge. We want you, our valued customers, to fully understand the reality of running a small family business in an ever changing and evolving macro-economic climate, where just building in the USA has become extremely difficult, and on the verge of “almost impossible”. Now you know and can make an informed decision.
We are NOT Going Out of Business
Sales at MagikFlame are good. As a matter of fact our sales volume increases year after year. People absolutely love our products, and constantly leave us 5 star reviews and rave about the quality and realism. However this year and last has been extremely difficult with the Freight and Logistics situation we described as well as microchips shortage and other factors that are out of our control. Even though our production may be slowing considerably, and might even stop for a time while we wait for parts, we are not going anywhere. You can rest assured that MagikFlame will be here to support you and your product for the foreseeable future. If anything we are growing and do not plan to close even though we are being heavily impacted by the situation described in this article. We do have plenty of replacement parts on hand should any fireplaces need warranty work as these parts have been set aside for such occasions, just like automakers. We sincerely appreciate your support in believing in and standing behind an American Business who strives to build the best and most realistic fireplace on the market, bar none. Nobody else pushes the limits of electric fireplaces the way we do, and we will continue to innovate and survive into the foreseeable future no matter what the world throws at us. We are a strong and committed team that will continue to fight and push on no matter what.