Original author: Sebastian Moss
TSMC (TSMC), Unhua Electronics (UMC) and Samsung warned customers to raise prices on the grounds of inflation concerns, rising costs of electricity and parts and high interest rates.
What makes the problem even more complicated is the global uncertainty caused by the Russian-Ukrainian war and the ongoing impact of Covid-19 on China.
According to Bloomberg, Samsung may raise prices by 15-20%, depending on the process node. The more mature the chip technology is, the greater the price increase.
Once negotiations with customers are completed, the price increase is expected to be implemented in the second half of this year.
TSMC and UMC plan a small, single-digit price increase - however, while Samsung kept its price stable last year, both Taiwanese companies increased costs last year.
As the world's largest foundry chip maker, TSMC implemented its largest price increase in 10 years in August last year, raising the price by 20% as it hopes to fund more than $100 billion in factory expansion amid a tightening of global chip supply.
According to Nikkei Asia, it now targets a price range of 5-8%, which also depends on the process technology.
is expected to take effect from early 2023.
Last year, the company also said it would stop its customary practice of lowering prices every quarter after its chip design customers put into mass production.
While the global chip shortage is expected to last for several years – especially as equipment shortages slow down the launch of new factories – consumer demand is changing, which may affect how people feel about the shortage.
At the beginning of Covid-19, demand for home computing devices surged. The chairman of TSMC had warned at the end of March that now, as many consumers use available devices, and the increasing economic uncertainty, there are signs that demand for smartphones and personal computers is waning.
Last week, China's largest chip maker SMIC (SMIC ), said demand for such products "declines like a rolling stone" - however, the company was more severely affected by the Ukrainian war because it has customers in Russia and Ukraine and is more vulnerable to the Chinese lockdown that closed stores.
Globally, supply from chip manufacturers will be limited despite slowing consumer demand. Even in the context of a slowdown, demand for cloud server chips and 5G network devices is expected to continue to grow.
