The COVID-19 pandemic was a major challenge for society in every aspect of our lives. Even the technology industry suffered a great impact due to the all disruption in the manufacturing, supply chain, etc. The crisis in the global chip market has affected smartphones, gaming consoles, video cards, laptops, and more. All these products have become expensive over the last year due to the chipset shortage. According to reports, the situation may start to improve early in 2022. However, apparently “early 2022” is too optimistic to be true. Many chipmakers have raised their prices due to the lack of supply and high demand. Taiwanese Semiconductor Manufacturing Co. (TSMC) has decided to increase the price of its chips for a second time.
TSMC has reportedly notified its customers that it plans to increase prices of advanced chips, from the 7 nm and below. Currently, the 5 nm standard is the most cutting-edge solution we have. However, we know that companies are already working on the 3 nm and 4 nm. MediaTek, for instance, a strong partner for TSMC is expected to unveil its first 4 nm chip later this year. The Taiwanese fellow will certainly suffer from the new price hike. The prices of these advanced chips will be increased by around 10 percent.
Meanwhile, TSMC will increase the prices for chips built on 16 nm and above nodes to around 20 percent more. The report from DigiTimes, states that the hike will the price of a single wafer processed on a 28 nm node going all the way up to $3,000 from January 2022. Companies will have a strong reason to adapt to the modern nodes. The increased prices will apply to orders scheduled to be fulfilled starting December.
2022 smartphones may become pricier
Since the last fall, TSMC has raised chip prices by more than 10%. As the strong demand continues to outrun supply, the Taiwanese company has decided to increase prices once again. Fabless semiconductor companies like Qualcomm, Apple, NVIDIA, AMD, and MediaTek rely on TSMC to produce their own chips. Therefore, the new price hike will certainly affect everything from smartphones and tablets to video cards and gaming consoles. However, the increased prices come into effect from Q1 2022, it likely won’t affect products launching in the next few months. Therefore, the devices will likely become more expensive in 2022, and we’re not expecting them to go cheaper before 2023.
Previously, the Taiwanese company said it would invest about $100 billion in advanced semiconductor technologies. It includes building greenfield chip manufacturing plants and expanding the capacity of existing foundries. In addition to TSMC, other chip companies hiking prices include GlobalFoundries, PSMC, SMIC, and UMC.