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TSMC reportedly ending discounts, increasing wafer prices

TSMC and other foundries may be raising prices amid unprecedented demand for chips

TSMC logo (Reuters photo)

TSMC logo (Reuters photo)

TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) will reportedly end volume discounts for its biggest customers and raise wafer prices starting next year amid soaring demand.

Strong demand for items like personal computers, gaming consoles, smartphones, televisions, and other electronics has led to an increased need for state-of-the-art chips produced using 5 nm and 7 nm processes and for less advanced ones made using mature nodes, according to Tom’s Hardware, an online publication for the "hardcore PC enthusiast." This overwhelming demand has created a semiconductor shortage.

TSMC’s largest clients had been receiving discounts for the 300 mm processed wafers they purchase. The Taiwan company’s discount prices fell within 3 percent, but starting January 2021, the firm has decided to stop these discounts, according to CNA.

TSMC said that it does not comment on unofficial information concerning prices, and it remains unclear if the company will indeed cut discounts for all its customers. It is also unclear if TSMC’s putative decision is due to excessive demand or increased prices by its rivals.

Increased demand for basic chips made on 200 mm wafers has led to companies like United Microelectronics Corp (UMC) raising their prices in recent months, CNA reported. It remains to be seen how pricing changes at TSMC, UMC, and other foundries will affect prices of downstream electronic devices.