TSMC to raise semiconductors by up to 20%

It is known that TSMC has notified customers of a semiconductor price increase on August 25. The price increase is expected to affect many customers, including Apple and Nvidia, and some are concerned about the increase in the selling price of products using semiconductors.

The period of the increase is expected to be from the second half of 2021 to the first half of 2022, and according to the official, the price of semiconductors manufactured by the process following 7 nm adopted by TSMC for iPhones will be increased by up to 10%, and the prices of semiconductors manufactured using the process of 16 nm or higher, such as automobiles, will be raised to the maximum. It is said to be raised by 20%.

The price hike is expected to affect many companies, including Apple and General Motors. The impact on TSMC’s largest customer, Apple, is expected to be large, and according to reports, Apple is likely to raise the prices of other products such as iPhones and was concerned about price increases due to rising manufacturing costs.

When Apple announced its third quarter 2021 earnings, Apple said that it could expect more sales if there was no shortage of semiconductors. Analysts say TSMC has two reasons for raising its price. One is that the price increase suppresses demand and supplies only TSMC semiconductors to customers who are essential. The other is to look at the long-term, and TSMC will generate high profits to cover investment funds such as plant expansion.

TSMC is constructing a plant in Arizona at a cost of $12 billion, and is announcing that next-generation 5nm and 3nm manufacturing process semiconductor production will start in earnest in 2022. An analyst analyzed that TSMC is spending a huge amount of money on advanced semiconductor processes, and that if the price rises, it can review facility investment.

TSMC said it was already raising more than 10% over the fall of 2020 and spring of 2021, and in the second quarter of 2021, total sales were $1.932 billion, up 99% from the same period last year. Bernstein Research, a brokerage firm, analyzed that the semiconductor hike would increase total sales by 10 to 15 percent, and this result will be reflected in the first quarter of 2022. Related information can be found here.