TSMC rumored to increase price by 25 percent; could lead to increased smartphone pricing

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipset manufacturer, was recently rumored to increase its pricing by 15 percent because of the on-going chip shortage.

However, the first quarter of the year is about the end and the company has not yet raised the pricing. But a new report coming from United News claims that TSMC could raise the price of its 12-inch wafers by $400.

This could result in a 25 percent price hike which will be an all-time high record. It’s noteworthy that the company has shifted to 5nm process nodes for the chipsets, making them more powerful and energy-efficient.

During the second half of next year, a Taiwan-based company is expected to start shipping 3nm chips. The next-generation process node is forecast to deliver 25%-30% more power and 10% to 15% more performance at the same power levels.

Because of the strong demand for the chips and low supply, TSMC has walked back the discounts that it offered to its customers. But the company is facing other situations that are beyond its control and adds to the company’s expenses.

A lack of rain has created a serious water shortage and the city where TSMC is based received only half the amount of rain in 2020 compared to the previous year. This has forced the company to arrange for water tankers at its facilities.

If TSMC decides to hike wafer prices by 25 percent and cancel the previously negotiated deals with the companies, the smartphone makers could end up shelling more money than they budgeted for and that cost can be passed to the customers.



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