TSMC plans to increase the prices of most advanced chips by roughly 10%; less advanced chips will cost about 20% more.
It’s hard to imagine a world without chips. They’re at the very heart of the devices that we use daily while working, travelling, staying fit and entertaining ourselves – from cars to smartphones and from MRI scanners to industrial robots and data centers.
An electronic chip is also known as an integrated circuit. It consists of components such as transistors, resistors and diodes which are all contained in one small plate. The plate will be made from a semiconductor material, most often silicone. It consists of many complex layers of semiconductor wafers, copper and any other required materials.
In the middle of an ongoing chip shortage, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) plans to raise its prices by 10% to 20%. This has greatly affected the electronics industries such as LED displays, TVs, mobile phones, and electric vehicles, to name but a few. Although the chip foundry doesn’t sell directly to end-users, this price increase will eventually filter through the supply chain.
Keep in mind that TSMC’s price contracts are annual, so the new prices don’t take effect until January 2022. Although the company is one of the largest chipmakers, its rising prices are just part of an ongoing trend that will make this year a banner year for semiconductor companies but a difficult one for CIOs and other customers who buy equipment that contains lots of chips.