TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co (TSMC) is asking its suppliers to cut prices next year in order to boost profitability.
According to DigiTimes, TSMC is in discussions with its equipment and material suppliers on having them reduce their prices by 15% for 2022 in a bid to cut costs. The move could also help domestic suppliers, according to CNA.
Domestic suppliers have always offered lower prices than foreign companies, while at the same time TSMC, has been committed to increasing its proportion of locally procured materials and equipment. TSMC’s move to lower prices could create more opportunities for Taiwanese suppliers, CNA said.
Last year, TSMC purchased 60% of its materials and 44.8% of its equipment from domestic companies, said CNA, citing TSMC data. The world’s largest contract chipmaker plans to increase local material purchases this year to 60.5%, while domestic equipment acquisitions are expected to rise to 50%.
The latest move to lower supply prices comes on the heels of TSMC's announcement last week of a price increase for chips. Prices for its more advanced processes, such as its 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%.