Semiconductor Prices Rise Again... TSMC Announces 15% Increase in Car Semiconductor Prices

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] A global semiconductor shortage is occurring, and Taiwan's TSMC, the world's largest foundry (contract manufacturing) company, is considering a price increase of up to 15%, focusing on automotive semiconductors. Earlier, Dutch NXP, Japanese Renesas, and Taiwanese UMC also announced price hikes one after another, making it inevitable for automakers to face increased manufacturing costs.

According to the Nihon Keizai Shimbun on the 26th, TSMC plans to implement a phased price increase as early as late February to March. It is known to be considering a price increase of up to 15%, mainly for automotive semiconductors. This is an unusually large price increase since last fall. The global semiconductor supply shortage and the approximately 6% rise of the Taiwan dollar against the US dollar over the past year are also cited as reasons behind the price hike.

The Nihon Keizai Shimbun analyzed, "Usually, automakers and parts suppliers negotiate once a year, and automakers typically request price reductions, but this time, parts suppliers handling semiconductors are demanding price increases, which is unusual," adding, "This shows that the pricing power for semiconductors has shifted from automakers to semiconductor manufacturers, revealing the severity of the semiconductor shortage."

Accordingly, the newspaper reported that automakers, the final customers of semiconductors, will inevitably face the double burden of production cuts and increased manufacturing costs.

TSMC stated that although all factory lines are operating, it is difficult to increase production in the short term. Industry experts explain that it takes at least half a year just to refurbish production lines for increased output.

As the semiconductor supply situation became unusually severe, countries including Germany, as well as the United States and Japan, which focus on the automotive industry, have requested Taiwan through diplomatic channels to increase semiconductor supply. This is because ongoing supply shortages have disrupted production at global automakers such as Volkswagen, Ford, Toyota, Nissan, and Chrysler.

The Nihon Keizai Shimbun also predicted that in the future, semiconductor shortages may occur not only in automotive semiconductors but also in consumer electronics such as PCs, potentially accelerating price increases rapidly.

Meanwhile, Taiwan has selected semiconductors as a national strategic industry and has focused on its development. Thanks to this, TSMC's sales in the fourth quarter of last year increased by 25% compared to the same period the previous year, and net profit surged by 50%.

This content was produced with the assistance of AI translation services.