TSMC Set to Raise Prices

TSMC is preparing to raise prices on its chip production, a move that will have a global impact on the price of electronics....
TSMC Set to Raise Prices
Written by Matt Milano

TSMC is preparing to raise prices on its chip production, a move that will have a global impact on the price of electronics.

TSMC is already the world’s most important semiconductor manufacturer. The company builds chips for Apple, Intel, Samsung, Qualcomm, Nvidia and others. As a result of its size and economy of scale, the company has been slower than its smaller rivals to raise prices, but that appears to be changing.

According to Nikkei Asia, TSMC is preparing its biggest price hike in a decade, driven largely by the company’s commitment to increased investment over the coming years. TSMC has previously promised to spend $100 billion over the next three years, and is looking to pass some of that expense on to its clients.

According to Nikkei, response to TSMC’s decision has been mixed.

“We are glad that TSMC eventually adjusted prices so that it could fend off the practice of double-booking, when industry players race to secure enough chip production capacity during a shortage,” K.S. Pua, chairman and CEO of Phison Electronics, told Nikkei.

“We are still short of supplies and want more chip capacity to support our growth for the second half of 2021,” Pua said.

Others were less enthusiastic.

“We are all in a great shock and all of our account managers need to speak to our customers to see if we can renegotiate some of the contracts,” another chip executive told Nikkei. “We haven’t seen TSMC introduce such a broad rate increase in over a decade.”

Either way, it’s a safe bet that some of the most popular phones, tablets and computers may be at least a little more expensive over the next couple of years.

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