A shortage in chips is affecting supply of Chinese 5G smartphones, prompting fears of a possible price hike.

Lu Weibing, vice president of the Xiaomi Group, lamented the shortage in chips on Chinese social media Weibo as the company’s latest model, Xiaomi Redmi K40, was launched with 300,000 stocks available.

Xiaomi 10 and OnePlus 8 are among products that have extended their sales cycle, signaling a shortage in Qualcomm Snapdragon 8 series chipset. Another Chinese smartphone brand, Oppo, also admitted there is a short in supply of chips across the industry.

Other industries, including car manufacturing and the production of routers, video cameras and household surveillance cameras, also felt the heat of the shortage.

William Li, founder and CEO of electric car manufacturer NIO, warned last week that disruptions caused by the global chip shortage could affect production and sales growth, as quarterly losses widened. “We should have the chip supply to meet domestic demand but the risk is still quite high,” he said.

To ensure the development of high-quality chips, authorities have to reduce tax on the manufacturer and strengthen basic facilities required, said Tian Yulong, chief engineer with the Ministry of Industry and Information Technology.

Many Chinese consumers fear that the shortage will drive a surge in prices of 5G smartphones as analysis shows that a fall in supply is possible in the next two years.

The latest official figures show that domestic sales of smartphones reached 40 million in January, a year-on-year increase of 92.8%.

Hit by the U.S. sanctions and without alternative available, the supply of communication chips has a huge impact on Chinese production of phones, severely undermining its competitiveness, said Vincent Lau, chair professor at the Department of Electronic and Computer Engineering at Hong Kong University of Science and Technology.

Though China also produces its own chips, they are low-end products in comparison and are not sufficient as a replacement. Even if the authorities invest considerable resources to develop the industry, a breakthrough takes at least three to five years to achieve.

Chinese smartphones are unlikely to hike up their prices due to market pressure however, given the competition from foreign brands, he added.

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