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Hardware

TSMC Hikes Chip Prices Up To 20% Amid Supply Shortage (nikkei.com) 55

Posted by msmash from the up-next dept.
Contract chipmaking giant Taiwan Semiconductor Manufacturing told has told that it plans to raise prices on products by as much as 20%, in what would be the company's steepest single increase. From a report: The price increases and the time frames for the hikes differ depending on the client, according to reports by Taiwan's Liberty Times newspaper and other media outlets. For some companies that received TSMC's notice, the hikes took effect immediately. TSMC and other Taiwanese semiconductor companies raised chip prices by more than 10% between last fall and this spring. But with strong demand continuing to outstrip supply, TSMC decided to sharply increase prices again. The increased costs tied to ramping up production are being passed downstream, with the company enjoying better bargaining power amid the global chip crunch as well. This move likely will impact the sticker prices of end products. A TSMC spokesperson declined to comment to Nikkei about the higher chip prices. Concerns over lower profitability are another reason behind the price hikes. The company has said it will make $100 billion in capital investments over three years through 2023. That commitment has fueled qualms about a potential decline in profits as TSMC prepares to boost its overseas expansion.
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TSMC Hikes Chip Prices Up To 20% Amid Supply Shortage More

TSMC Hikes Chip Prices Up To 20% Amid Supply Shortage

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  • This isn't really suprising (Score:4, Insightful)

    by Baconsmoke ( 6186954 ) on Thursday August 26, 2021 @02:54PM (#61733059)
    Supply and demand alone would make this a sound business decision. Couple that with needing funds to do major manufacturing expansion and this is kind of a no-brainer.

  • Special shout-out to all of those on Slashdot insisting there's hardly any inflation, with everything up by double percentages across the board...

    All of these increases in costs will be hitting consumers in the next year or two, and heading up from there.

    Good luck everyone!

    • Re: (Score:3)

      by King_TJ ( 85913 )

      Yep.... a good friend of mine warned of this a couple months ago. He unfortunately passed away of complications from COVID so he didn't live to see the accuracy of his predictions. But as a long time small business owner (had at least 6 or 7 different computer stores, comic book and game shops), he kept telling us that "now is the time to buy whatever things you need, if you can afford to do it". There were a few outliers where it probably was best to hold off a bit, like buying another car or big projec

      • "now is the time to buy whatever things you need, if you can afford to do it"

        This is key. Start making a list of things that would really suck to be without, buy things to mitigate potential problems.

        The biggest thing I have my eye on, is a modern portable solar panel large battery combo, enough to run a refrigerator for a few days, or maybe even indefinitely if you get enough panels. I just don't see things like water delivery failing in a way that huge water filters are super important, but I do see our

        • "now is the time to buy whatever things you need, if you can afford to do it"

          This is key. Start making a list of things that would really suck to be without, buy things to mitigate potential problems.

          *writes down*

          Blow...up...dolls.

          Hey you have your crisis, I'll have mine.

          • Blow...up...dolls.

            Hey you have your crisis, I'll have mine.

            Depending on how the future goes you may well be able to rent that pout for quite a profit!

            Maybe keep one just reserved for your own use though.

    • Also a special shout-out to the person insisting some time ago on slashdot there was no shortage, it was all just bad planning. Because they were "iN thE InDustRy." Which is funny, because those are not even close to mutually exclusive things. Well, welcome to the shortage, baby. It's here, and we're gonna pay for it.

      • How is this shortage terrible when more people than ever are getting to own laptops? That is a hell of a thing. We have a situation where more people than ever can own a new laptop, and yet it is a big problem? Sure, a shortage is a problem but in this case it does not mean gloom. They have to increase prices to justify the gamble of building new factories.

    • Almost everything got more expensive because supply chains and labor supply world-wide are scrambled, locked down, and/or confused due to the pandemic. Stasis is broken. What are you proposing to stop inflation, slow the economy? Then we'll have a pandemic and mass riots (worse than Jan. 6)

      • What are you proposing to stop inflation, slow the economy?

        It's really simple. You raise interest rates just like Volker did back to break the inflation of the 70s.

        Now that would utterly destroy the stock market. But it will fall anyway of its own accord, eventually.

        Let me put your question another way - Do you want a horrible crash now, or a much worse one later? Because the longer we delay allowing the market to fix things without constant life support from the fed, the worse the eventual reckoning wil

        • What life support? Demand increased, and so prices went up in order to raise capital that can be spent on new factories. End result, more consumer needs are met. Compare that to previously when people wouldnâ(TM)t even buy laptops as much. Now more people than ever are getting to own new laptops.

          • What life support? Demand increased, and so prices went up

            You don't understand the root cause of inflation - money added to the system at enormous volumes (the literal definition of monetary inflation), and on top of that demand did not increase - supply has diminished, as costs to produce rise and shipping systems everywhere start to fail.

        • Re: (Score:1)

          by Tablizer ( 95088 )

          You raise interest rates just like Volker did back to break the inflation of the 70s.

          Giving us the nasty recession of the early 80's. Plus, the causes may be different

          Let me put your question another way - Do you want a horrible crash now, or a much worse one later?

          In the past an expanding GDP "shrank" most debt, including war debt. Although, we don't know if such will happen again.

          And, try to sell the voters on taking big spanking now to avoid a bigger spanking in the future. Logical or not, it won't fly p

          • Giving us the nasty recession of the early 80's.

            Now imagine that x10, because that is what is coming, all because we have refused to fix what has been broken for decades now.

            The cure is often painful, but always better than delaying treatment.

            You just do not understand what a powerful healing force the recession was for correcting problems in the market at large,

            • Re: (Score:1)

              by Tablizer ( 95088 )

              You just do not understand what a powerful healing force the recession was for correcting problems in the market at large

              There are different expert opinions on that such that a given politician is less likely to go with the painful "bleed it better" theory.

    • The biggest driver of inflation in America is the cost of cars, both new and used.

      New cars are expensive because the availability of semiconductors constrains production.

      Used cars are expensive because people hold on to them because they can't buy new cars.

      So most of the inflation is due, either directly or indirectly, to semiconductors.

    • But of course, the cost to defend against Chinese aggression will need to be passed along. Rooftop missile batteries aren't cheap.

    • It would have been really weird if so many people around the world had taken a year off and no economic impact was felt. How do you pay that off? Some inflation is a reasonable part of the answer.

      • How do you pay that off? Some inflation is a reasonable part of the answer.

        No, inflation was exactly the wrong thing to do, it made everything worse and prevented a real recovery.

        Now the economy is in shambles, it's desiccated husk stood up and pantomiming life only through grim manipulation by the federal reserve.

        If you haven't been paying attention, they entire banking system was screwed back in 2008 and basically been propped up ever since then, but the limits of the ability to continue the charade is ve

  • Screw your entire JIT demand.

    If you "outsource" your builds, you can suck it;

  • I mean actual alternatives?
    Because to me they look like a de-facto monopoly and hence the key bottleneck in all this.

    E.g. who else offers EUV lithography machines?

    • I think probably a bit worse than that. I thought almost all the equip is now single source. ASML, applied, and a couple others. Sales negotiation must be interesting. Only a couple customers and a couple suppliers. Worse, the customers practically codevelop the equipment now. For some of the older nodes, not nearly as interesting.
    • While ASML is the only company making EUV machines, there are other bottlenecks exacerbated by a worldwide pandemic. For example, even if TSMC could supply all the chips to their customers; that does not mean every customer can finish their products. Electronics components are in low supply like capacitors and MOSFETs which TSMC and ASML do not control.

    • Probably nobody, because very few people know how to build them. To build and train a competitor would be like going to Vegas hoping to make money by hitting it big at the slot machines. I mean most people will not even spend one dollar on a lottery ticket, why would anyone invest millions on something with only slightly better odds of return? Many companies tried to compete with ASML and failed. When it comes to chips everyone wants the best and second place engineers would mean lower yield rates and highe

  • The cost to manufacture a ship is probably a small cost compared to the cost of research, development, design, etc...

  • My Post from 2008 [slashdot.org]
    My Post from July 2021 [slashdot.org] and FollowUp [slashdot.org]

    1) AMD Spins of fabs.
    2) Intel/VIA/TSMC/IBM buys AMD Fabs.
    3) Intel/VIA/TSMC/IBM Fabs charges huge price to manufacture AMD CPU's.
    4) AMD CPU Prices skyrocket. Unable to find a cheap reliable FAB, AMD loses price competitive edge.
    5) AMD Stock tanks.
    6) ...
    7) LOSS.

    Welcome to Step 3.

    Although the scenario today is different than what was forecast in 2008, it's still viable. TSMC only has so much fab capacity. While they are planning to expand it's not going to ha

  • Approved, as long as they drop the price once the shortage goes away.

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