TSMC is reportedly increasing some of its chip manufacturing prices by as much as 20 per cent in the near future.
For things like microcontrollers and other components on larger process nodes – think 120nm down to about, we guess, 16nm – TSMC may raise its prices by up to 20 per cent, and for higher-end processors and system-on-chips on its more-advanced nodes – everything else down to 7 and 5nm – prices may go up by as much as 10 per cent, according to the Wall Street Journal this week.
Typically, the larger-process-node chips tend to be workhorses in vehicles, appliances, and most electronics, and state-of-the-art application processors and accelerators found in phones, PCs, and servers are fabricated using the smaller process nodes. The price rises, if true, may lead to more expensive gear for buyers.
Taiwan-based TSMC is a semiconductor-maker-for-hire, churning out parts for Apple, Nvidia, AMD, Intel, and many others from said customers' blueprints. It cannot, depending on the process node and buyer, fabricate chips fast enough to meet soaring demand, which results in shortages of certain electronics and products.
Compounding the chip production scramble, TSMC factories were temporarily shut down in the pandemic due to shelter-in-place orders, and water, a critical resource in semiconductor manufacturing, was in short supply as its home nation was hit by drought.
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The rise in costs may ease TSMC's order backlog if smaller customers contract with other fabs, though companies that need the most advanced nodes, 7nm and smaller, don’t have much choice. Only TSMC and Samsung have the capabilities to produce components at 5nm.
TSMC also needs the money to expand its fabrication plants outside of Taiwan. It is planning to build up to six fabs in Arizona. That said, the biz recorded an $18.5bn profit in 2020 so it's not exactly hurting for cash.
“We have acquired land and started the construction of new facilities," CEO C.C. Wei previously said. "TSMC expects to invest about $100bn through the next three years to increase capacity to support the manufacturing and R&D of leading edge and specialty technologies."
A TSMC spokesperson told us overnight that the chipmaker "would not comment on pricing issue nor the market rumors." ®