A report from The Wall Street Journal revealed that TSMC (Taiwan Semiconductor Manufacturing Company, Limited), which claims to be the world’s largest semiconductor foundry company, will raise production costs by 10-20%.
The 10% increase will be for the more advanced chips, while the 20% will apply to the less advanced ones.
TSMC is the company that makes the chips designed by Apple for all of its products. Likewise, it has major customers such as Qualcomm and AMD, so new-generation iPhones, Macs, Android phones, computers, and consoles could see a price increase.
Apple could be the only one that would not raise its prices
Although the most logical thing would be to think that companies will pass this price increase on to users through the cost of their products, it is likely that Apple is one of the few companies that decides to cushion the blow and not raise the price of its devices.
The reason for the above is based on the high cost that Apple products already have, making it easier for the company to maintain its sales prices and continue generating a good profit margin.
On the other hand, Android phone manufacturers that tend to stand out for their cost / benefit ratio if they could increase the price of their phones because Qualcomm chips could also raise their rate.
More profits, but more challenges
According Tom’s Hardware, revenue from the manufacture of advanced 5 and 7 nanometer chips represents almost 49% of TSMC, hence they are the products with the lowest percentage of increase.
However, while the above is going to translate into more profit for the company, it should actually be seen as a way to raise more money for the company’s ambitious plans, which hopes to make 3-nanometer chips by 2022, and which has planned to invest 100 billion dollars through 2023 in manufacturing and development centers.
On the other hand, DigiTimes revealed that the price increase in semiconductor manufacturing is not an exclusive move by TSMC, as companies such as GlobalFoundries, Powerchip Semiconductor Manufacturing (PSMC), Semiconductor Manufacturing International (SMIC) and United Microelectronics (UMC) also announced increases in production costs.