TSMC, UMC, SMIC: Price increases at foundries for more profit

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TSMC, UMC, SMIC: Price increases at foundries for more profit

Image: TSMC

According to consistent media reports from Asia, Taiwanese foundries are turning the price screw. Older manufacturing processes from UMC and TSMC are primarily mentioned, but at TSMC advanced manufacturing processes such as N7 & Co are also said to become more expensive. SMIC and Globalfoundries should join in.

Older manufacturing processes are becoming significantly more expensive

The rumor mill in Asia has been following the topic for days, but the picture seems to be manifesting itself more and more and now the industry paper has jumped DigiTimes on the subject on and reported among others from United Microelectronics (UMC), which will raise prices in several price rounds in September and November of this year and again in January of the coming year. UMC’s factories have been at full capacity for some time, and the only way to earn something from the current boom is to raise prices.

Now the prices at UMC for exposed wafers with chips in 22 and 28 nm are said to be at a higher level than at TSMC – but that did not last long. According to the latest reports, TSMC is pulling along with price increases of 15 to 20 percent in these older processes. Above all, chips in 40 nm and larger, which the automotive industry, for example, are eagerly awaiting, are expected to become more expensive.

But the latest technologies are also taking part

Taiwan’s largest daily newspapers to report today also via TSMC’s price adjustments, because they should not only affect old processes, but also the best manufacturing technologies. Price increases of around ten percent should also take effect here at the latest by the beginning of 2022, which is officially supposed to be the case due to increased material costs for new factories and expansion stages, among other things.

In the high-end sector, TSMC is already considered expensive, but given the lack of competition, the provider can dictate the prices. According to media reports, TSMC wants to consolidate the high margin with an increase from 50 to 53 percent and generate so many additional billions in profits. In the end, the prices, together with the already difficult conditions in the semiconductor market and the logistics industry, are likely to be passed on to the customer – it will probably be more expensive.

But it’s not just big Taiwanese contract manufacturers who are raising prices. China’s only surviving flagship project in the field, SMIC, is also expected to increase prices by around ten percent, although they are still at a lower level than wafers from Taiwan. And Globalfoundries is also said to have increased prices, although the manufacturer, like all other companies, does not officially want to comment.

Update 09/06/2021 07:47 a.m.

According to the Taiwanese media, the Price increases for Apple chips are only around 3 percentFor AMD, the price increase should also be a moderate 5 percent. Further media reports say that Apple’s chips in 5 nm production are already almost cost twice as muchwhat to pay for 7nm products. State-of-the-art production without competition clearly dictates the price, because Apple is TSMC’s largest customer with 20 to 25 percent of sales, but this should ultimately be satisfactory for both sides.

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