TSMC’s most advanced chips will cost 10% more

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TSMC, the largest semiconductor foundry on the planet, is raising the prices of its most advanced chips by about 10%.

The company is also raising the prices of its less advanced chips by about 20%, according to a Wall Street Journal report that announced the move on Thursday. The increases will take effect later this year or next year.

TSMC makes chips for many of the largest tech firms in the world. Apple relies on TSMC for its A14 Bionic system-on-chip that powers its latest iPhone and the Apple Silicon processors inside its Macs.

A truly influential whale

Nvidia is another leading tech company that partners with the foundry to make GPUs (graphics processing units).

Even Intel, which competes with TSMC in the semiconductor manufacturing business, is working with the company to make parts of its 100 billion-transistor Ponte Vecchio processor for artificial intelligence applications.

The Wall Street Journal believes that the upcoming price changes are part of an effort by the company to help ease the global chip shortage. The prices should deliver more capital to TSMC to expand its manufacturing capacity. More capacity means more chips made and demand met sooner.

Tackling the global chip shortage

In April, TSMC said it would spend $100 billion on its chip manufacturing and development over the next three years. Raising prices could help ease the chip shortage for some time. The reasoning follows the laws of supply and demand.

Increased prices will reduce demand in some markets and help free up capacity for companies that need chips urgently.

A recent shortage in auto chips caused the car industry to temporarily shutter factories in some markets or resort to parking vehicles to await chips. Such companies will need new silicon faster than other segments, which a freed-up TSMC would deliver.