Purchasing semiconductor products amidst the ongoing supply crunch is already proving to be a challenge. Unfortunately, it seems things could soon get even more expensive, as a recent report says that Taiwan Semiconductor Manufacturing Company (TSMC) is planning to raise its prices by up to 10% starting next year. The move is reportedly aimed at offsetting rising costs for raw materials, manufacturing equipment, and the construction of overseas fabrication plants.
The information came from Nikkei Asia, which cited several sources familiar with the matter. According to the publication, the company’s advanced chipmaking prices will increase by 5% to 10%, depending on the customer and the type of chip being produced.
Unfortunately, the price hike isn’t limited to TSMC’s advanced manufacturing processes. Even its mature process technologies, including the 12nm, 16nm, and 28nm nodes, are expected to see price increases of up to 10%, according to Nikkei Asia.
TSMC’s Price Hike Justification
In Nikkei Asia’s report, the company attributed the price increase to rising costs for raw materials, manufacturing equipment, and the construction of new fabrication plants outside Taiwan. Reuters reached out to the company, with a representative saying that the move is “strategic, not opportunistic” and that TSMC will continue to work closely with customers and “sell our value” to them. However, the representative did not provide further details on the upcoming price changes.
Earlier in June, TSMC CEO C.C. Wei said that the company would like to raise prices for customers but would avoid the sudden price increases seen from some companies in the memory industry. This could provide some context behind the reported price hike, although it remains possible that the company may introduce further increases in the future.
Prices Might Only Go Up From Here
With all that said, it would not be surprising if this increase eventually leads some major companies, including NVIDIA, Apple, AMD, and others, to adjust their prices to account for higher manufacturing costs. As a result, consumers could potentially end up paying more for smartphones, tablets, laptops, and other devices powered by chips manufactured by TSMC.
Rising component costs have become an ongoing challenge for both companies and consumers worldwide, and there does not appear to be a clear end in sight. With the memory shortage expected by some industry figures to continue for years due to sustained demand and limited supply growth, we could see more companies passing higher costs down to customers in what becomes a recurring cycle.
Before concluding, we’d like to point out that the opinions are just that: opinions. This section is not definitive pricing predictions and should not be treated as such. While higher manufacturing costs may influence device pricing, the actual impact will depend on how companies manage their respective margins and production costs.
(Source: Nikkei Asia, via Reuters)
