Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) shares yesterday rose 2.27 percent to the highest since Aug. 12 on media speculation that the world’s biggest chipmaker planned to hike wafer prices by up to 20 percent due to a quarters-long chip crunch and rising manufacturing costs.
The Chinese-language Economic Daily News reported that TSMC had told chip designing customers about raising prices from next quarter by 10 to 20 percent, as the chipmaker aims to maintain its gross margin, which stood at 50 percent last quarter.
The Liberty Times (sister paper of the Taipei Times) yesterday said that TSMC had upped wafer prices by 20 percent for most of its technologies, including 7-nanometer, 12-nanometer, 28-nanometer and 40-nanometer technologies.
Photo: Ann Wang, Reuters
The new prices took effect immediately after customers received the notifications at noon yesterday, the report said.
TSMC and MediaTek Inc (聯發科), one of TSMC’s top clients, could not be reached for comment as of press time last night.
TSMC has been reluctant to raise prices even though its peers, such as United Microelectronics Corp (UMC, 聯電), increased prices on new orders by 10 percent or more early this year amid drastic increases in manufacturing costs.
Responding to investors’ concerns over its pricing strategy, TSMC chief executive officer C.C. Wei (魏哲家) last month said that the “company’s pricing strategy is strategic, and we don’t take an opportunistic approach.”
“We work with our customers closely and we want to help them to be successful while we get a proper return,” Wei said. “So that’s why we are firming up our wafer pricing, and we are confident that we can keep our gross margin at 50 percent or above in the long term.”
A short-term imbalance in the supply chain, driven by a need to ensure supply security, and the structural increases entailed by long-term demand are expected to persist, the Hsinchu-based company said earlier.
TSMC’s capacity would remain tight through next year, fueled by increasing demand for its advanced technologies and specialty technologies used in 5G devices and applications of high-performance computing, it said.
The COVID-19 pandemic has fundamentally accelerated a digital transformation, making semiconductors more pervasive and essential in people’s lives, it added.
TSMC shares have rallied 9.14 percent this year, closing at NT$585 yesterday in Taipei trading.
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