TSMC Raises Chip Prices As Supply Shortages Persist

TSMC Raises Chip Prices As Supply Shortages Persist

Taiwan Semiconductor Manufacturing Corporation( TSMC ) is the world’s largest chipmaker, and is responsible for the processors used by Apple, Nvidia, Qualcomm, AMD and even some Intel products.

Taiwan semiconductor manufacturer TSMC plans to raise prices for its advanced chips by about 10% and less advanced products by about 20%, according to a new report from The Wall Street Journal.

The supply of semiconductors is becoming an increasingly important factor for major technology and automotive companies, where chips are still difficult to obtain.

There are a lot more factors that go into the prices of phones, laptops, and gaming consoles than the actual bill of materials. So a 10-20% increase in processor and SOC costs may not necessarily correlate with a similar price increase for consumers.

But raising the prices of one of the most important and expensive components of the device (for example, two of the most expensive parts of the iPhone 12 are the Qualcomm X55 5G modem and the Apple A14 Bionic processor) means that there can be a trend towards price increases from some of the most famous devices in the world.

The Wall Street Journal report does not specify whether Apple is affected by TSMC’s price hike. Or whether it chooses to pass on these additional costs to customers if it notices a rise in chip prices.

But Taiwan’s semiconductor maker is the only supplier in the world that can manufacture the chips at the advanced level and size that Apple needs to make its Apple A- and Apple M-series chips for the iPhone, iPad and Mac.

In turn, the CEO of Apple warned that the restrictions may affect the iPhone and iPad products coming this fall. Especially for older and less advanced chips.

The higher prices may help alleviate some of TSMC’s supply issues. This is by reducing some of the demand which has led to a scarcity of parts.

The higher prices also help TSMC continue to raise the funds it needs for its ambitious investments in capacity expansion. That includes spending $100 billion through 2023 on plans such as a $12 billion manufacturing center in Arizona and other projects.

Taiwan Semiconductor Manufacturing Co. had previously warned that the shortage could likely extend into 2022. In its latest quarterly earnings report.