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Taiwan’s TSMC increases chip prices by up to 20% amid global shortage

Taiwan Semiconductor prices for 7nm and 5nm chips expected to jump 7% to 9%

(Reuters photo)

(Reuters photo)

TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co (TSMC) announced on Wednesday (Aug. 25) it intends to hike chip prices by as much as 20% for some of its products.

Several integrated circuit (IC) design manufacturers reported receiving notices from TSMC about the price increases, which for some take effect immediately, according to CNA. As the global semiconductor shortage continues, both TSMC and chipmaker United Microelectronics Corporation (UMC) had already previously raised prices.

Industry sources told CNA that TSMC’s prices are usually around 15% to 30% higher than UMC’s chips; however, after several UMC price increases this year, some of TSMC’s process quotes are now lower than UMC.

Prices for TSMC’s more advanced processes like 7nm and 5nm chips are expected to increase by around 7% to 9%, while prices for its more mature processes will be raised by about 20%, CNA reported.

The price increase could be in response to TSMC’s plan to boost capital expenditures by US$100 billion over the next three years, in addition to its overseas expansion plans in the U.S. and Japan. The Taiwanese chipmaker intends to build a US$12 billion 5nm fab in Arizona and is considering a 28nm chip plant in Kumamoto.

TSMC’s price increases are expected to have a ripple effect down the supply chain. The world’s largest contract chipmaker declined to comment on the price hikes.