Posted on 06/24/2021 10:06:32 AM PDT by blam
Taiwan Semiconductor Is Hiking Chip Prices Up To 20%
Here comes even more inflation…
Just days after we wrote about how Taiwan Semiconductor was the centerpiece at the middle of the global semiconductor shortage, the company has said they are going to be raising prices by up to 20% next year. The report comes via Chinese media and crossed the wire early on Thursday morning.
Earlier this year we reported that semi prices were expected to rise through all of 2021, but recent reports have suggested that production was picking up again. In fact, car chip vendors are now able to “ramp up output” thanks to more foundry house support coming online, Digitimes Asia reported this week.
But that isn’t stopping TSMC from hiking prices, as was telegraphed earlier this year. For example, back in April, suppliers like Japan’s top silicone producer, Shin-Etsu Chemical Co. Ltd. marked up prices between 10% and 20%, according to Caixin, who reported that growing input costs and supply disruptions could be tide that continues to push up prices. Shin-Etsu blamed their price hikes on the rising cost of silicon metal, which they said was a result of demand out of China
Names like Semiconductor Manufacturing International Corp. (SMIC), United Microelectronics Corp., and Powerchip Semiconductor Manufacturing Corp. had all announced intentions to raise prices in similar fashion. Taiwan Semiconductor Manufacturing Co. Ltd. has also said prices are coming in the form of suspending wafer price reductions beginning December 31 this year.
One Jiangsu diode manufacturer said it’s suppliers had raised prices five times since the second half of 2020. The hikes represented a total markup of between 30% and 40%, including a new 10% hike that came into effect last week. The same firm’s inventory was at “half their normal level”, Caixin reported.
One semiconductor salesman said: “The whole industry is scrambling for (chips), and it’s hard for us to make a purchase.”
We called TSMC the “one chipmaker the entire world is depending on” in a piece we published earlier this week that highlighted the world’s reliance on their production.
Not only has TSMC made headlines for proposing to expand production into the United States, as we have documented numerous times, but now it is making headlines for how it has become the center of the semiconductor world – and how that can leave the world vulnerable.
TSMC’s chips are in “billion of products”, including iPhones, computers and cars, the Wall Street Journal writes in a new profile of the company. The company has slowly become the world’s 11th most valuable company, with a market cap of about $550 billion. The company reported $17.6 billion in profits last year on revenues of about $45.5 billion. TSMC makes “around 92% of the world’s most sophisticated chips,” the report says.
This has led to the U.S., Europe and China looking to cut their reliance on chips out of the Taiwanese company. But that’s a tough task given its contribution globally. The U.S., for example, only accounts for 12% of the world’s chip manufacturing, down from 37% in 1990.
Analysts aren’t confident of there being a more diversified semiconductor supply chain “anytime soon”. They attribute this to TSMC’s “hard driving culture” and “deep pockets”. The industry has become so complex that once one producer falls behind, it becomes tough to catch up.
But hey, we’re sure the price hikes will just be transitory, right Jerome?
They’ll need the money to take on the Chicoms
Wait till Taiwan gets invaded by the Chicoms, there won’t be any products that depend on chips to buy.
Thanks plugs.
TSMC has the most advanced fab in the world.
Apple and Qualcomm are now their prime customers
I think the only thing keeping China from invading Taiwan is the fear they have hidden nuclear capability.
Which is quite possible, given their tech background and that we once stored Nukes there.
Interesting that the date for the comparison starts right after Reagan era that encouraged business through his fiscal policies. Now we once again see a Democrat administration seeking punitive tax increases on business because voters are economically illiterate. Who do these Liberals think actually pay the taxes: the consumer who buys the business products or the company who pays the tax? Biden promises to increase both personal and corporate taxes and the Left Lemming all applaud. Personally, I think I can spend my money better than Biden can.
Bttt
The price of chip technology compared to the processing power of a chip has plummeted for decades. If the price of a chip increases 20% due to material cost, and then you factor in the increase in processing power from a year ago, is it a wash?
We found generic chips nearly as good as Lays. But we really like Zaps Cajun Crawgators. Oh, wrong chips?
1978 S.Korea, S. Africa, Israel and Taiwan were all UN outcasts and jointly developed bombs or nukes. S.Africa turned theirs in before Mandela. The other still have theirs.
1978 S.Korea, S. Africa, Israel and Taiwan were all UN outcasts and jointly developed bombs or nukes. S.Africa turned theirs in before Mandela. The other still have theirs.
Make them here. What a novel concept.
I love how Republican assume that fabricating electronic chips overseas is a default thing. BS. HOW ABOUT MAKE THEM HERE????
Taiwan needs the money for cruise missiles…rats let strategic manufacturers leave US but slojo and ho will bring them back…right…
Law of supply and demand...
This will just give Beijing Biden another excuse to kowtow to his Chicomm masters.
OPEC 2.0
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