Samsung and TSMC, the two largest semiconductor makers, plan to raise their circuit prices as early as mid-2022. An increase of up to 20% which will affect the prices of many electronic devices.
The inflation that has already hit many sectors of our daily lives for several months is not about to stop. After energy (electricity, gas, oil), food products (and not just wheat derivatives), construction materials and countless services, it could also affect leading electronic devices, such as computers, phones, game consoles, storage devices, televisions, mobile accessories and connected objects. Clearly, most of the elements that populate our digital world! And, this time, the price increase won’t just be due to speculation resulting from a shortage – or the fear of a shortage: it will be directly linked to the price increases that Samsung and TSMC were planning.
TSMC and Samsung: chips up to 20% more expensive
In fact, as disclosed Bloomberg, the two largest semiconductor foundries in the world plan to significantly increase the prices of the chips they produce in their specialized factories. High-tech electronic circuits that Korean (Samsung Semiconductor) and Taiwanese (Taiwan Semiconductor Manufacturing Company) manufacture on behalf of other high-tech companies, including Apple, Nvidia, AMD, Intel, Qualcomm, Mediatek, Broadcom and Hi-Silicon. In other words, all the industry giants who entrust these two specialists with the production of chips (processors, graphics circuits, SoCs, controllers, etc.) integrated into their products.
And the announced increases are not symbolic: because if TSMC has already warned its customers of an increase of 5 to 8%, Samsung would rather consider an increase of 15 to 20%! But these revaluations are in addition to previous ones, TSMC having increased its prices by 20 `last year. To justify these price readjustments, the founders put forward higher costs, both for the supply of raw materials, transport and production. Thus, suppliers such as ASML, the Dutch manufacturer of photolithography machines used to produce the components, pass on their own additional costs to their customers such as TSMC and Samsung. At the same time, engravers must ensure heavy investments in new generation production lines, to produce components in 3 and 5 nm technologies, for chips that will be used in future Apple products, for example.
Electronic circuits: an increase that will affect all devices
These increases will obviously not be without consequences for consumers. Because Samsung and TSMC customers will obviously pass on these increases in the prices of their own products. Certainly, the prices of smartphones, computers, monitors and other electronic devices will not increase in the same proportions, since chips represent only a part of their components and costs. But these small supplements will be added to others, related in particular to transport as to the general shortage which continues. And it’s a safe bet that, even without soaring, the prices of all high-tech products will be revised upwards in the coming months, failing to fall or, at a pinch, to stagnate, as we could have hope. Without even talking about the iPhone 14 which is likely to be more expensive than its predecessors, so don’t expect to see prices drop at the end of 2022 and in 2023. Clearly, if you see a good deal by the end of the year, don’t wait!