Logitech Chief Executive Hanneke Faber has zipped around the world for months, visiting suppliers on a quest for a critical component in her company's keyboards, mice and gaming equipment.
"I've spent my summer begging, borrowing and stealing chips," Faber said, then clarified: "I don't want to say steal. Begging and borrowing!"
The chip shortage persisting across the economy isn't likely to let up in the near term, she said. Only a handful of companies make memory and storage chips right now, much of which is fueling the artificial-intelligence boom. That is squeezing consumer-tech companies like Logitech.
Faber spoke with The Wall Street Journal about how she is managing the challenge, while also finding some upside in the disruption. This interview has been condensed and edited for clarity.
WSJ: What does navigating the chip shortage look like for you?
Faber: Traveling in Asia and finding chips-and in Switzerland, actually, where some of our chip suppliers are, too. It's a real thing: This AI is eating my chips. Almost every single one of our products depends on some sort of chip. So that's been a challenge.
WSJ: How long does this last?
Faber: I don't have a crystal ball, but I don't see it getting a lot better for another 12 to 18 months.
WSJ: How do you think about setting prices for your products, and whether people will pay more?
Faber: We launch about 40 new products a year and that is our main way to grow the average consumer price because new products we introduce at a premium price-they have premium performance, otherwise I wouldn't be launching them. Like the newest gaming mouse, the Superstrike.
WSJ: How much does that cost?
Faber: That's $180, while your average gaming mouse is probably about $60. So that's a massive premium, but for a massively better performance. It broke the clicking-speed Guinness World Record.
WSJ: That's a thing?
Faber: Oh, totally.
WSJ: If the conflict in the Middle East continues, will you need to change anything?
Faber: We've made some changes in our supply chain with the Strait of Hormuz being closed, where we take products from, how we move them around.
WSJ: What's an example?
Faber: Our biggest distribution center for Europe, the Middle East and Africa actually is in Dubai. We've changed that and now our distribution centers in Holland and even in China serve part of those regions because it just is not very practical at the moment to have that go through Dubai.
WSJ: In the AI era, more people are using their voice rather than typing. Does that change how you build products?
Faber: So we actually love that; that is a real change. Well, actually on a personal level, I don't love it. My husband's a big voice user. So annoying, but anyway...
WSJ: He's using voice to text all day long?
Faber: Nightmare! [Laughs.] But it is an additional modality for work and that's a good thing. I think of Logitech as kind of the eyes, the ears and the hands of AI.
We watch coders: And, yes, they're coding with microphones, they're coding with headsets, they're speaking to their code. But, because they want to go so fast, some are using gaming pedals to code now with voice. So that was new, but hey, we're the market leader in that, too.
WSJ: You spent much of your career at Procter & Gamble, and later you were at Unilever. What do those companies do to get close to consumers that you've brought to Logitech?
Faber: Sometimes I'm, like, "Oh, three years ago I was selling ice cream at Unilever." It is different, but there's also a lot of similarities. In the end, you've got to be really close to your consumer, your user.
At Procter & Gamble, you're very used to doing in-home visits. So you go to India and you go look at how people wash their hair. It's always fun. That was not something we were doing at Logitech. So that's been kind of an eye-opener to people. I like going into people's homes and seeing how they work or how they're gaming.
WSJ: Do people know the CEO is in their house, watching them game?
Faber: [Laughs.] No. But wherever I travel, I do that with the team and you notice things.