As the world's largest and most advanced wafer foundry factory with the most advanced technology, TSMC's every move will have a significant impact on the global semiconductor industry.
According to the Taiwan Economic Daily, TSMC plans to raise its wafer foundry quotation by 6% from January 2023. Some TSMC customers have confirmed that they have received price increases notices. This price increase is the second price increase for the company in a year.
is different from the company's first wide-listed OEM price in August last year. Next year, the price increase of TSMC's advanced and mature processes is comparable. Last year, the company actually raised the price of 7-nanometer and more advanced process chips by 7-9%, while the price of mature process chips of 16-nanometer and above was as high as 20%.
According to Nikkei Asia, TSMC's price increase is because of inflationary pressure, rising costs and meeting its huge capital expenditure plan. Regarding TSMC's price increase, Nikkei Asia quoted people familiar with the matter to comment:
"In advance notice (price increase) is to give customers some time to buffer and prepare customers for price adjustments. TSMC's price increase measures are to solve the cost and increase capital demand for historic expansion."
Wall Street News mentioned that although global chip demand is currently disturbed by the Russian-Ukrainian crisis and the epidemic, TSMC said it will maintain its previous capital expenditure plan of US$40-44 billion. In order to maintain its market leadership, TSMC announced a three-year, $100 billion in capital expenditure plan in 2020, mainly for the expansion of advanced processes such as 5nm and 3nm.
Regarding TSMC's price increase this time, Nikkei Asia quoted a semiconductor industry executive as saying that given the slowdown in demand for products such as smartphones and personal computers, customers may find it difficult to fully accept TSMC's price increase plan. The executive added:
"For advanced processes, customers may easily accept price increases; for mature nodes, customers may be very challenging to accept price increases."
Regarding this price increase, TSMC stated that it would not comment on price issues. Taiwan Economic Daily said that some TSMC IC design customers have confirmed that they have received price increases notices, but they are reluctant to talk about the relevant details.
It is worth mentioning that TSMC's price increase "second score" occurred after the company released its first-quarter financial report with the "strongest in history" of net profit. In Q1 2022, TSMC, as the "big winner in chip shortage", hit a new quarterly revenue, with net profit rising by 45% year-on-year, exceeding NT$200 billion (7 billion US dollars). At the same time, the company issued strong second-quarter guidance: gross profit margin will expand from 55.6% in the first quarter to 56%-58%, the best level in 10 years; the full-year revenue guidance, denominated in US dollars, was raised to 25%-29%, exceeding the previous expected growth of 20%.
At the first quarter earnings call, TSMC President Wei Zhejia said that although demand for PCs, tablets and smartphones is weakening, demand for automotive chips is still strong, and chip production capacity is expected to continue to be tight this year. In terms of the stock price of
, since reaching a temporary high at the beginning of the year, the company's stock price has fallen by more than 60% to US$87.30 due to unfavorable factors such as the Federal Reserve's interest rate hike and the Russian-Ukrainian conflict. After the news of this price increase came out, the company's stock price rose slightly by 1.95%.
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