Taiwan Semiconductor Manufacturing Company (TSMC), a chipmaker that supplies silicon to some of the world’s largest technology companies, is reportedly expected to raise prices again.

Like reported by iMore and Nikkei Asiait seems that the 20% price increase it applied to its products in 2021 is not enough to offset the effects the pandemic has had on its overall operations.

Narumon Bowonkitvanchai / Getty Images

According to Nikkei Asia, which has well-established resources in the technology industry, TSMC has apparently informed its customers that the costs associated with its silicon will become more expensive from 2023 onwards.

The TSMC allegedly attributed the rise in prices to “rising inflation fears, rising costs and its own plans for large-scale expansion to help alleviate the global supply crisis”. Supply chains with bottlenecks have been a constant theme for the past two years.

iMore highlights how TSMC customers, which include Apple, Intel, Nvidia and AMD, are already paying higher rates due to the significant 20% increase that materializes in 2021.

Elsewhere, in early 2022, a DigiTimes report states that TSMC processor prices will rise “significantly” in 2022 due to rising foundry costs.

These prices will now be subject to a new increase in the range of 5% to 8%. Although the changes are due in 2023, the reason for the relatively early announcement is to “give customers some buffer to prepare for price adjustments, while TSMC’s move to raise prices is to deal with rising costs. and capital needs for historical expansions. “

As for the enlargement mentioned in the report, TSMC is preparing for that spent up to $ 44 billion to expand its capacity to produce chips only in 2022. This figure is part of a larger $ 100 billion investment strategy aimed at strengthening its position as one of the most valuable technology companies in the world.

Taiwanese semiconductor
Taiwan Semiconductor (TSMC), Fab 5 Building, Hsinchu Science Park, Taiwan Peellden / Wikimedia

The technology industry is increasingly relying on TSMC

So who is TSMC? The company supplies chips that power some of the world’s most popular devices. Apple is its most valuable customer to date.

iMore points out that TSMC produces A-series chips needed for products such as the iPhone 13 and iPhone SE.

In addition, Apple outsources silicon production to TSMC for chips such as the M1 Pro and The M1 Max is in some of the company’s latest devices, including the MacBook Pro 2021 and Mac Studio.

Although we have recently seen a drop in prices for GPUs in particular, of course, when a technology corporation is hit by rising costs for its parts, the end result usually culminates in customers having to pay the difference instead of the company taking the brunt.

Get ready for more expensive GPUs, processors, iPhones and more

Not only the more expensive iPhone and Macs are likely to become the new norm, at least for about a year after 2023; Nvidia and AMD are also relying on TSMC for their chips upcoming next-generation GPUs.

Team Green has reportedly already paid $ 10 billion to TSMC for its 5nm silicon order, while AMD is is expected to pay $ 6.5 billion this year to its chip suppliers, including TSMC.

In any case, as technology advances and becomes more common, TSMC is enjoying record success in terms of end results.

Most recently, it set a record revenue in April with sales of $ 5.81 billion, a huge jump of 55% compared to 2021.

Even throughout 2021, TSMC survived six consecutive quarters of record sales. For example, in December, it recorded its highest revenue in a month at that time, generating about $ 5.6 billion.

It is clear that leading technology companies are relying on TSMC silicon more than ever, and by all accounts this will continue to be the case.

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