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.
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.”
UNCONVINCING: The US Congress questioned whether the company’s Chinese owners pose a national security risk and how the app might influence young users TikTok chief executive officer Shou Chew (周受資), confronted with an unforgiving, distrustful US Congress, tried to give answers in his testimony on Thursday that avoided offending either the US government or China. However, his evasiveness left Congress unsatisfied, with representatives hungrier than ever to punish TikTok for ties to its parent company ByteDance Ltd (字節跳動), based in Beijing. He did not bring his company any closer to a resolution. Politically, TikTok is in a tougher spot. Its executives had been discussing divesting from ByteDance to resolve US national security concerns, people familiar with the matter told Bloomberg. However, China this week said
The Investment Commission yesterday approved a Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) application to invest an additional US$3.5 billion in its Arizona subsidiary to manufactured advanced chips. The world’s largest contract chipmaker’s board of directors last month approved the funding project after TSMC started moving manufacturing equipment into the fab in December last year in preparation for the production of 4-nanometer chips next year. TSMC said it has also commenced the second phase of facility construction in Arizona. The second fab is to produce semiconductors using 3-nanometer technology in 2026. Altogether, TSMC plans to spend US$40 billion on the Arizona fabs, doubling its
Microsoft Corp has threatened to cut off access to its Internet search data, which it licenses to rival search engines, if they do not stop using it as the basis for their own artificial intelligence (AI) chat products, people familiar with the dispute have said. The software maker licenses the data in its Bing search index — a map of the Internet that can be quickly scanned in real time — to other companies that offer Web search, such as Apollo Global Management Inc’s Yahoo and DuckDuckGo. Last month, Microsoft integrated a cousin of ChatGPT, OpenAI’s AI-powered chat technology, into Bing. Rivals
Sanofi SA’s drug Dupixent succeeded in a late-stage trial for chronic obstructive pulmonary disease (COPD), raising the odds that the blockbuster would be the first biologic medicine cleared to treat the lung disorder. Dupixent, which is already prescribed for asthma and some skin conditions, showed a 30 percent reduction in the rate at which patients’ COPD worsened compared with those who received a placebo during the stage-three Boreas trial, the company said in a statement yesterday. The positive data could herald a new era of cutting-edge treatments for the life-threatening respiratory affliction and provide another major boost in demand for the French