Taiwanese contract chip manufacturing giant is raising prices for most of its manufacturing process technology nodes, according to a report from Culpium. The price hikes have come in response to the meteoric price hike by memory manufacturers, say the publication's sources. The global memory chip market has been thrust into the spotlight following booming demand from the AI sector. However, TSMC's price increases will focus on all manufacturing process technology nodes reaching as far back as the mature 7-nanometer node, which implies that they could create ripple effects for a variety of sectors.
TSMC Eager To Raise Prices Following Similar Moves By Memory Chip Manufacturers
According to the details, Culpium's sources suggest that TSMC's top management is asking business development and sales teams to find ways to raise prices. The desire for higher prices stems from similar moves by memory chip manufacturers such as SK hynix and Samsung. The teams have been instructed to link the price hikes to TSMC's manufacturing technology strengths and value proposition.
Word of price hikes has been making its way across the supply chain for quite some time. A recent report from Daily Korea suggested that TSMC was interested in raising the prices of its 3-nanometer manufacturing process technology.
TSMC's Price Hikes Leave Customers Surprised, Says Report
However, this report had claimed that the price hikes were due to the higher cost of introducing extreme ultraviolet (EUV) lithography and the costly advanced packaging processes. The report also claimed that TSMC's price hikes would also lead to a growing interest in Samsung's advanced manufacturing processes.
While the earlier report discussed the advanced 3-nanometer processes, today's report suggests that the price hikes will also cover the older 7-nanometer process technology. This development left some of TSMC's customers surprised, with some believing that the hikes might also cover some mature manufacturing processes.
Not only are the price hikes broad-based, but they have already started, according to the sources. They could range between 5% to 10%. Culpium speculates that these price hikes could also boost TSMC's gross margins by two percentage points.
TSMC holds significant bargaining power in the contract chip manufacturing industry. It is the world's leading contract chip manufacturer and serves the needs of all major technology companies. The list of the firm's customers includes NVIDIA, Apple, AMD and even Intel. Intel's CEO, Lip-Bu Tan, is pushing to set up his firm's Foundry business in order to effectively compete with the Taiwanese firm.
In its statement to the publication, TSMC remarked that it "does not comment on pricing. Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and sell our value to them," the firm said.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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