CPU processor, laptop, and smartphone costs could be on the rise thanks to price hikes from the world’s largest chip manufacturers.
Semiconductor foundry TSMC plans on hiking up its prices by as much as 20% later this year or by early next year, according to The Wall Street Journal, citing unnamed sources.
The foundry counts Apple, AMD, and Qualcomm among its many clients. Most notably, TSMC’s 7-nanometer chip manufacturing process is behind AMD’s Ryzen 5000 CPU processors and the graphics technology inside the PlayStation 5 and Xbox Series X. Meanwhile, TSMC’s 5nm process produces the silicon found inside the iPhone 12 and the latest MacBooks.
As a result, the looming price hike could affect numerous products if vendors choose to pass on the cost increase to consumers. According to the Taiwan-based DigiTimes, TSMC is settling on a smaller price increase of around 10% for its chip manufacturing processes under 16 nanometers. Meanwhile, older chip processes used to build silicon found in cars will see a 20% price increase.
TSMC is raising the fees to help drive down demand during the ongoing semiconductor shortage, which has been hitting automakers hard. The goal is to free up manufacturing capacity to clients, who have no choice but to rely on the company for chip production, the Journal says.
At the same time, TSMC also plans on using the price hike to fund new chip-making factories over the long term. So if the investment can help the world avoid another chip crunch, then it may be worth it. Currently, supplies for the PlayStation 5, Xbox Series X and PC graphics cards for AMD remain thin.
The price hike may also benefit Intel, which is starting its own foundry business to compete with TSMC. That said, Intel itself is sourcing some chip manufacturing from TSMC to build graphics cards and even upcoming CPUs.