On Wednesday, Taiwan Semiconductor Manufacturing Co. (TSMC) has informed its clients that it plans to raise prices on products by nearly 20%. This could be among the steepest single increase by the company, reported Nikkei Asia.
Several media outlets also reported that the price increase and the time frames for the hike differ depending on the client. For few clients, the hikes took effect immediately as soon as they received TSMC’s notice.
TSMC along with other Taiwanese semiconductor companies raised chip prices by more than 10% between last fall and this spring. However, TSMC decided to sharply increase prices again when the strong demand continued to outstrip supply, and this increased cost is passed on to the customers with TSMC enjoying better bargaining power.
This price rise passing downstream will impact the cost price of end products.
TSMC also said that it will make $100 billion in capital investments over three years through 2023. Nikkei reported that this commitment has fuelled qualms about a potential decline in profits as TSMC prepares to boost its overseas expansion.
