Samsung Electronics Co is talking with foundry clients about charging as much as 20 percent more for making semiconductors this year, joining an industry-wide push to hike prices to cover rising costs of materials and logistics.
Contract-based chip prices are likely to rise around 15 percent to 20 percent, depending upon the level of sophistication, people familiar with the matter said.
Chips produced on legacy nodes would face bigger price hikes, while new pricing would be applied from the second half of this year, they said, adding that Samsung has finished negotiating with some clients and is in discussions with others.
Photo: Reuters
Samsung’s decision is a shift from last year’s relatively stable pricing policy, when the industry rushed to raise prices in the wake of a global chip shortage. The company is facing multiple risks such as the war in Ukraine, lockdown measures in China, rising interest rates and inflation. Those are throwing a wrench into business plans typically made a few years in advance.
The move translates into additional pressure on makers of smartphones, cars and game consoles to lift the prices consumers pay. Samsung and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) account for more than two-thirds of global capacity for outsourced chips.
Costs for chipmakers are now rising at about 20 to 30 percent on average on all fronts, from chemicals, gas and wafers to equipment and construction materials.
Contract chip manufacturers including TSMC and United Microelectronics Corp (UMC, 聯電) are telling clients that they plan to raise prices by a mid-to-high single-digit percentage, on the heels of a price hike several months ago.
Industry leader TSMC has told clients that it plans to raise prices by about 5 percent to 8 percent next year, following a 20 percent price hike last year, the Nikkei said.
UMC is also planning another round of 4 percent price hikes in the second quarter. ASML Holding NV — a key supplier to Samsung and TSMC — warned last month of rising pressure on labor costs, in addition to higher material and transportation costs.
The shortage forces customers to prioritize the ability to procure and secure needed chips over prices. Semiconductor makers have been trying to improve profitability, partly by shifting more weight to high-end chips, said Bloomberg Intelligence analyst Masahiro Wakasugi.
“This is an inevitable move for Samsung,” Wakasugi said. “Some customers may accept higher prices if they can get chips earlier than others.”
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to