The world’s largest contract manufacturer of semiconductors plans to increase its prices, as a global chip shortage drags on.
Taiwan Semiconductor Manufacturing Company – which counts Nvidia, AMD, Apple, and others amongst its customer base – has ramped up its investment in new fabs, and is thought to be looking to cover those costs, and benefit from the current crisis.
The Wall Street Journal reports that TSMC plans to increase the prices of its most advanced chips by roughly 10 percent, and the price of less advanced chips by as much as 20 percent.
The price jump is expected to take effect later this year, or early next year. The company, which declined to comment on its pricing, previously admitted it was ending a discount scheme for its biggest customers.
TSMC, which has a stranglehold on the production of 7nm-and-lower process node chips, is spending heavily on new chip factories.
Earlier this year, it said it would spend $100bn on new fabs to handle all the new orders. It is now conducting due diligence on a fab in Japan, which would be on top of that investment.
While TSMC has a huge profit margin on its products, reporting a net profit margin of 36 percent in the last quarter, it operates with a significantly less comfortable cash flow due to its hefty investment in new fabs and equipment.