TSMC, Samsung plan price hikes for chip designers – reports
(2022/05/13)
- Reference: 1652467333
- News link: https://www.theregister.co.uk/2022/05/13/tsmc_samsung_price_hikes/
- Source link:
Just as costs for some components have started to come down, TSMC and Samsung, the two largest contract chip manufacturers in the world, are reportedly planning to increase prices of production, which may affect Nvidia, AMD, Apple, and others that rely on the foundries.
Reports emerged earlier this week stating that Taiwan-based TSMC is planning price hikes in the single-digit percentages for legacy and advanced chip manufacturing technologies next year. Citing industry sources, [1]Nikkei reported that the price hike will be around five to eight percent.
On Friday [2]Bloomberg reported that South Korea's Samsung is planning to raise prices for chip designers by 15-20 percent this year, citing industry sources. Legacy nodes will be hit hardest, and the new pricing will come into effect in the second half of the year.
[3]
Over the course of the pandemic, high demand for electronics has overloaded semiconductor plants, giving foundries power to [4]raise the prices of wafers for chip designers.
[5]
[6]
But with [7]demand now waning for devices like PCs and smartphones, the increased manufacturing costs will put chip designers in a tight spot, forcing them to raise prices for products or take a hit to their profitability.
One source told Nikkei that some chip designers may balk at TSMC's increased prices for legacy nodes, though they will more likely accept the hikes for newer nodes.
[8]Arm says microcontroller price hikes helped fuel sales
[9]AMD approaches '30%' x86 CPU market share, thanks to servers 'n' laptops
[10]How Intel and AMD hope to win the cloud security game
[11]GlobalFoundries' chipmaking machine unfazed by global disruptions
TSMC's planned price hike for 2023 is not as large as the one it enacted last year, which increased manufacturing costs for chip designers by as much as 20 percent. But that won't give them much solace, given that TSMC last year suspended its policy of cutting prices over time for clients whose products enter mass production, as Nikkei pointed out.
Samsung's reported incoming price hikes represent a significant change from last year, when it kept wafer prices relatively stable, according to Bloomberg.
Micron dangles predictable memory price agreements in front of vendors [12]READ MORE
The thing is, TSMC, Samsung, and other chipmakers aren't just rising prices for kicks. These companies are facing increased production costs amid several global issues, ranging from [13]Russia's invasion of Ukraine and [14]COVID-19 lockdowns in China to inflation and rising interest rates.
But it's not exactly promising for anyone who has been hoping for prices of various components, from GPUs to [15]microcontrollers , to stabilize.
[16]
There has been some relief recently, with a downturn in the PC market, for instance, [17]bringing down prices for graphics cards, but now there's a question of how long that will last. ®
Get our [18]Tech Resources
[1] https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-plans-another-price-hike-amid-inflation-concerns
[2] https://www.bloomberg.com/news/articles/2022-05-13/samsung-in-talks-to-hike-chipmaking-prices-by-up-to-20?sref=QY7kFAuy
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.theregister.com/2022/03/16/wafer_prices_semiconductor/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2022/04/11/pc_sales_slowing_idc
[8] https://www.theregister.com/2022/05/13/arm_results_ipo/
[9] https://www.theregister.com/2022/05/13/amd_intel_x86/
[10] https://www.theregister.com/2022/05/12/intel_amd_security/
[11] https://www.theregister.com/2022/05/11/globalfoundries_q1_results/
[12] https://www.theregister.com/2022/05/13/micron_dangles_predictable_memory_price/
[13] https://www.theregister.com/2022/03/11/ukraine_neon_supplies/
[14] https://www.theregister.com/2022/04/28/semiconductor_firms_china_lockdowns_mess/
[15] https://www.theregister.com/2022/03/25/chip_shortage_report/
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[17] https://www.theregister.com/2022/05/13/asus_q1_2022/
[18] https://whitepapers.theregister.com/
Reports emerged earlier this week stating that Taiwan-based TSMC is planning price hikes in the single-digit percentages for legacy and advanced chip manufacturing technologies next year. Citing industry sources, [1]Nikkei reported that the price hike will be around five to eight percent.
On Friday [2]Bloomberg reported that South Korea's Samsung is planning to raise prices for chip designers by 15-20 percent this year, citing industry sources. Legacy nodes will be hit hardest, and the new pricing will come into effect in the second half of the year.
[3]
Over the course of the pandemic, high demand for electronics has overloaded semiconductor plants, giving foundries power to [4]raise the prices of wafers for chip designers.
[5]
[6]
But with [7]demand now waning for devices like PCs and smartphones, the increased manufacturing costs will put chip designers in a tight spot, forcing them to raise prices for products or take a hit to their profitability.
One source told Nikkei that some chip designers may balk at TSMC's increased prices for legacy nodes, though they will more likely accept the hikes for newer nodes.
[8]Arm says microcontroller price hikes helped fuel sales
[9]AMD approaches '30%' x86 CPU market share, thanks to servers 'n' laptops
[10]How Intel and AMD hope to win the cloud security game
[11]GlobalFoundries' chipmaking machine unfazed by global disruptions
TSMC's planned price hike for 2023 is not as large as the one it enacted last year, which increased manufacturing costs for chip designers by as much as 20 percent. But that won't give them much solace, given that TSMC last year suspended its policy of cutting prices over time for clients whose products enter mass production, as Nikkei pointed out.
Samsung's reported incoming price hikes represent a significant change from last year, when it kept wafer prices relatively stable, according to Bloomberg.
Micron dangles predictable memory price agreements in front of vendors [12]READ MORE
The thing is, TSMC, Samsung, and other chipmakers aren't just rising prices for kicks. These companies are facing increased production costs amid several global issues, ranging from [13]Russia's invasion of Ukraine and [14]COVID-19 lockdowns in China to inflation and rising interest rates.
But it's not exactly promising for anyone who has been hoping for prices of various components, from GPUs to [15]microcontrollers , to stabilize.
[16]
There has been some relief recently, with a downturn in the PC market, for instance, [17]bringing down prices for graphics cards, but now there's a question of how long that will last. ®
Get our [18]Tech Resources
[1] https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-plans-another-price-hike-amid-inflation-concerns
[2] https://www.bloomberg.com/news/articles/2022-05-13/samsung-in-talks-to-hike-chipmaking-prices-by-up-to-20?sref=QY7kFAuy
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.theregister.com/2022/03/16/wafer_prices_semiconductor/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2022/04/11/pc_sales_slowing_idc
[8] https://www.theregister.com/2022/05/13/arm_results_ipo/
[9] https://www.theregister.com/2022/05/13/amd_intel_x86/
[10] https://www.theregister.com/2022/05/12/intel_amd_security/
[11] https://www.theregister.com/2022/05/11/globalfoundries_q1_results/
[12] https://www.theregister.com/2022/05/13/micron_dangles_predictable_memory_price/
[13] https://www.theregister.com/2022/03/11/ukraine_neon_supplies/
[14] https://www.theregister.com/2022/04/28/semiconductor_firms_china_lockdowns_mess/
[15] https://www.theregister.com/2022/03/25/chip_shortage_report/
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yn7VAik3TArd9P-7B5WExgAAAM0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[17] https://www.theregister.com/2022/05/13/asus_q1_2022/
[18] https://whitepapers.theregister.com/
New foundries
Locutus_of_Borg
New US foundries will come on line and give these guys some competition. I can’t wafer it.
Final device price ?
For most electronic devices (phones, computers etc) the foundry chip cost is a small part of the total device price.
The cost for a 300mm wafer processed at 7nm is in the order of $10k. This price is divided by the number of working chips derived from the wafer.
As an example given the size of a Ryzen chiplet it should be possible to get over 600 working chiplets from a single wafer giving a foundry cost for the bare chiplet of around $17 - if this increases to $18 (and assuming a similar increase in cost for the I/O chip) then the manufacturing cost of a Ryzen CPU would increase by $2 which is a small part of the selling cost of the completed CPU.
Given the inflation in so many things is running at several percent, the increase from TSMC is not surprising - they have to pay for electricity and consumables many of which will have increased in price.