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Rising chip prices to continue into 2022: Report

Rising chip prices to continue into 2022
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San Francisco: Rising chip prices, in general, are on track to continue into 2022 as the world’s biggest contract chipmakers are ramping up productions fees, which could end up impacting Apple and its chipmaker TSMC, media reports say.

TSMC makes chips for Apple, Nvidia, and Qualcomm. It always had production fees around 20 per cent higher than its rival. But with the semiconductor shortage, some of its competitors already charge more than TSMC, citing Nikkei Asia, 9To5Mac reported.

Now, the company is expected to prepare its biggest price hike in a decade. This which could impact a lot of tech businesses, the report said.

Industry sources told Nikkei Asia that TSMC is keen to weed out so-called double-booking, in which clients place orders for more chips than they need in hopes of securing production line space and support from contract chipmakers amid the global supply crunch.

This, in turn, has made it difficult for TSMC to grasp the “real demand” picture.

Counterpoint Research said that the rising chip prices may even impact smartphone makers’ business strategies.

A paywalled report from DigiTimes suggested that Apple would be facing bigger bills from TSMC. This is for its A-series and M-series chips.

TSMC will raise its quotes. Advanced sub-7nm process technologies quotes would rise. This will result in more manufacturing costs facing Apple and other major clients, according to industry sources.

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