TSMC to increase chip production prices by 10 to 20 percent

TSMC, the world's largest chipmaker, is increasing manufacturing costs by 10% to 20%. That is what several Asian news outlets and the Wall Street Journal have reported. 

Digital Times reports that the cost of manufacturing on TSMC's 7nm node and lower nodes will increase by 10%. The Taiwanese publication relies on insider information from the industry. A 16nm process or larger would result in a 20 percent increase in the cost of chips manufactured by TSMC. The Nikkei Asia newspaper also reports on the price increases, while the Wall Street Journal, citing its own sources, indicates the same percentage increases. The story has not received a response from TSMC.

The majority of the price increases would go into effect the following year. According to reports, TSMC is raising prices since the demand for chip fabrication is still quite high. In the meanwhile, it is still unclear whether greater manufacturing costs would be passed directly on to consumers. The price of a console is not directly related to the cost of materials. Apple, one of TSMC's top clients, has a significant profit margin on its devices, which means that the price rise does not have to be passed on to customers right once. Individual components such as processors or video cards, for example, may behave in a different way.

The vast majority of TSMC's revenue comes from the manufacture of tiny components. Nodes N5 and N7 generated 49 percent of the company's revenue in the quarter under consideration. Twenty-five percent of the total turnover was accounted for by processes N16 and N28. According to DigiTimes, some chip manufacturers have raised their pricing in recent months as a result of the high demand that has continued to exist. In addition to TSMC, GlobalFoundries, PSMC, SMIC, and UMC are among the companies involved.

Increased prices would take effect the next year.