🟩TSMC raises prices by 10~20%
TSMC has notified its customers that it will raise prices by up to 20 percent, Taiwanese media reported. Since last year, major Taiwanese semiconductor companies such as TSMC have raised prices by more than 10%, but they have decided to raise prices significantly again. However, TSMC has not commented on the price.
🟩 Reasons for further price increases
Preparation for
investment in new plants The company has announced investment in large-scale new plants in the United States and Taiwan, as investors are increasingly concerned about declining profits.
Lower
gross margin TSMC’s gross margin for the second quarter of 2021 decreased by 2.4 percentage points to 50%. This is due to the impact of soaring raw material prices.
Semiconductor shortages are becoming
more serious, and TSMC says the impact of the semiconductor shortage will continue until 2022 and is taking urgent measures to increase production. Therefore, there are circumstances in which it is necessary to pass on the increase in costs to prices.
🟩 Different price increases between cutting-edge and mature technologies
TSMC plans to raise the price of wafer processing using a manufacturing process of 7 nm or lower, which accounts for about 49% of revenue, by up to 10%. On the other hand, the price of wafers using mature 16 nm class or higher nodes will be raised by 20% for orders from December onwards.
🟩Summary
Against the backdrop of a shortage of semiconductors, TSMC will raise prices to meet the decline in profits.
If you raise prices too much, it will be judged as a geopolitical risk, so I think it is a difficult decision.
