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TSMC, Samsung to Hike Chip Prices

The HPC sector – in which systems utilize hundreds, thousands, even tens of thousands of chips – is chip-price sensitive. Now comes news that two of the world’s most advanced chip manufacturers, Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung, are warning customers they plan to raise prices significantly.

Due to global inflation, rising electricity and component costs, higher interest rates, supply chain woes and geopolitical instability (war in Ukraine, Covid lockdowns in China), the two companies along with United Microelectronics Corp. (UMC), say their chip prices will be raised by up to 20 percent, according to a story in Data Centre Dynamics.

The story cites an article from Bloomberg that Samsung could increase prices by between 15 and 20 percent depending on the process node, “the older the chip technology, the higher the price rise,” Bloomberg reported. “The price bump is expected to be enacted in the second half of this year, once it has finished negotiating with its clients.”

Less than double digit price increases are expected from TSMC, though it should be noted that while “Samsung kept prices steady last year…, (TSMC)  increased costs last year,” Data Centre Dynamics reported. “The world’s largest contract chipmaker, TSMC enacted its biggest price increase in a decade last August, bumping prices by 20 percent as it looked to fund a $100 billion+ factory expansion amid a global chip supply crunch.”

This year, TSMC plans to increases prices by 5 to 8 percent, depending on process technology, according to Nikkei Asia, a price boost not expected to take effect until early next year. The company also announced last year it will end its policy of lowering prices on a quarterly basis for its chip design clients after products go into mass production.

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