TSMC will increase chip prices up to 20 per cent due to shortage
The rises may help to find TSMC's overseas expansion, as it tries to recover from the chip shortage
Chipmaking giant TSMC plans to increase prices by as much as 20 per cent, according to the Wall Street Journal.
Citing people familiar with the matter, the WSJ says the chipmaker is considering increasing prices of its most advanced chips by about 10 per cent, while less advanced chips - used by customers like auto makers - will cost about 20 per cent more.
The prices hike will generally take effect late this year or next year, although some companies have already received notice about the hike.
TSMC is the world's largest chipmaker, making devices for Apple, Qualcomm, Nvidia, AMD, and even Intel.
It is not clear whether these companies will absorb the price hike themselves or if they will choose to pass the extra costs down to consumers and customers.
Industry analysts believe the price hike will help TSMC raise the money it needs for ambitious investments in expanding capacity, as it struggles to deal with the ongoing chip shortage.
The firm has said that it plans to spend about $100 billion in capital investments through 2023, including $12 billion on a new manufacturing hub in Arizona.
The company is also considering opening its first Japanese chip plant, in Kumamoto.
TSMC's investment commitment has fuelled qualms among its investors about a potential decline in profits, as the chip maker prepares to boost its overseas expansion.
The global semiconductor shortage has affected many industries, including smartphone and car makers, since the start of the pandemic. Forced factory closures due to social distancing measures, and unseasonal weather worldwide caused by climate change, have eaten into production levels at all chip firms.
Toyota, the world's largest automaker by sales volumes, said last week it would slash global production for September 2021 by 40 per cent, due to the shortage. General Motors, Nissan, Ford, Honda and Jaguar Land Rover have all also slowed or temporarily stopped production at some plants this year.
In recent months, consumers have also started to feel the impact of the chip crisis, with firms like HP raising prices by as much as 20 per cent.
Chip-makers have warned that the supply chain disruption could continue till 2023.