Posted on 05/13/2022 6:36:42 AM PDT by blam
Samsung Electronics is preparing to increase prices for chip contract manufacturing in the second half of this year which comes as no surprise given skyrocketing cost pressures eating away at the company’s margins.
Samsung’s contract-based chip prices are set to increase between 15-20% given the level of manufacturing complexity, Bloomberg said, citing people familiar with the matter, adding the new pricing model has been discussed and negotiated with clients.
Samsung’s decision comes as the cost of energy, raw materials, equipment, freight, and labor are rapidly soaring. The move was “inevitable,” said Masahiro Wakasugi, a Bloomberg Intelligence analyst.
Another component driving the price hikes is the ongoing global chip shortage. Then there are lockdowns in China driving lead times — the lag between when a semiconductor chip is ordered and delivered — to 26.6 weeks, a record high.
Rising chip prices will only increase consumer costs for smartphones, tablets, computers, game consoles, televisions, smart speakers, automobiles, and the list goes on and on. Samsung is the world’s second-largest chip contract manufacturer.
TSMC, short for Taiwan Semiconductor Manufacturing Company, is the world’s largest contract chip manufacturer and recently notified clients of price increases of 5% to 8% next year, following a 20% price hike last year.
There aren’t alternatives to the world’s largest chipmakers. This means companies that require chips to power their products have no leverage and are stuck with expensive chips, which will only mean the cost of consumer electronics will go higher.
A very difficult job.
"TSMC, short for Taiwan Semiconductor Manufacturing Company, is the world’s largest contract chip manufacturer and recently notified clients of price increases of 5% to 8% next year, following a 20% price hike last year."
Morris Chang was passed over for president of Teas Instruments in 1984. He went on to start TSMC.
I am very thankful for what TSMC has been able to do. They are the best foundry on the planet.
So the complexity of chip making that has been done for decades has suddenly increased?
set to increase between 15-20% given the level of manufacturing complexity,
Bull.
More price gouging. The cost of one or two components of the cost go up and suddenly the whole price goes up by the same amount. Not likely.
Understandable, but the democrats will holler “price gouging”.
EUV is a very expensive process.
They started developing it back in the 90’s and for a long time, I was pretty sure they would never get it to work.
ASML’s 150M machine which saved the chip industry.
https://www.youtube.com/watch?v=5Ge2RcvDlgw
Lots of neon in making chips?
Looks like it is tapering off.
Too bad we can’t all be brilliant.
That was a very good video.
I ended my photolithography career at TI at the end of 1994.
Pure neon gas is required in the fab process. Multiple suppliers raised a red flag when the war got underway in Ukraine. One big supplier had 3 weeks of neon "on hand". When exhausted, they have to shutdown.
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