TSMC to increase chip production prices by 10 to 20 percent

The Taiwanese TSMC, the largest chip maker in the world, is going to increase production prices by 10 to 20 percent. That write various Asian media and the Wall Street Journal. The price increases would go into effect next year.

The price of production on the 7nm node and smaller nodes of TSMC will increase by 10 percent, DigiTimes writes. The Taiwanese newspaper relies on industry sources. Chips that TSMC makes on a 16nm process or larger would be 20 percent more expensive. Nikkei Asia also writes about the price increases and the Wall Street Journal mentions the same percentages, based on its own sources. TSMC has not responded to the report.

From next year, most of the price increases would take effect. TSMC is said to raise prices because the demand for chip manufacturing is still very high. It is still uncertain whether higher production prices will be passed on directly to consumers. Console prices are not directly related to material costs. Apple, one of TSMC’s largest customers, has a lot of margin on its products, so that the price increase does not have to be passed on immediately. This could be different with individual components such as processors or video cards.

TSMC derives most of its turnover from production on small processes. The company’s N5 and N7 nodes accounted for 49 percent of revenue in the quarter. The N16 and N28 processes accounted for 25 percent of the turnover. According to DigiTimes, several chip manufacturers have increased their prices in recent months due to continued high demand. In addition to TSMC, these include GlobalFoundries, PSMC, SMIC and UMC.

TSMC revenue per node