TSMC is the world’s largest chip maker. The company responsible for processors used by Apple, AMD, Nvidia, Qualcomm and even some Intel products. And its products are about to get much more expensive. The company does plan to increase the prices of its advanced chips by about 10%. It will also increase that of its less advanced products by about 20%, according to a new report from the Wall Street Journal.
Semiconductor sourcing has become an increasingly important factor for large tech and automotive companies. The fleas remain difficult to find. The prices of phones, laptops and game consoles are determined by many factors other than the actual nomenclature. So a 10 to 20% increase the cost of processors and SOCs will not necessarily translate into a similar price increase for consumers.
Chips are indeed one of the most important and expensive components of a device. For example, two of the three most expensive coins in theiPhone 12 are his modem Qualcomm and his SOC A14. But the increase in chip prices means we could be heading for price increases on some of the most popular devices in the world.
TSMC: Apple’s main supplier
The Wall Street Journal report does not say whether Apple will be affected by TSMC’s price increases. It also does not say whether it will choose to pass these additional costs on to its customers in the event of an increase in the price of chips. But TSMC is literally the only supplier in the world capable of manufacturing chips at the advanced level and at the volume that Apple needs to manufacture its A and M series chips for its. iPhones, Macs and iPads.
In addition, Apple CEO Tim Cook has warned that silicon supply constraints could arise for its next products this fall. On the company’s latest earnings conference call, he specifically pointed to supply constraints for older and less advanced chips.
Reduce chip supply issues
The good news is that higher prices could help alleviate some of TSMC’s supply issues. This will effectively reduce part of the demand which is the source of the parts shortage. It will also help TSMC continue to raise the funds it needs. Funds that can above all be used for its ambitious investments in the expansion of its capacities. These investments which mainly include spending of $ 100 billion until 2023 for its new projects. Projects such as its manufacturing center 12 billion dollars in Arizona and other projects. In its last quarterly earnings report, TSMC previously warned that the shortages would continue. In particular, they could last until 2022.