Global chip prices are on track to surge further next year with producers hiking production fees amid the ongoing shortage, Nikkei Asia reported.

  • Taiwan Semiconductor Manufacturing Co., the world’s biggest contract chipmaker, is gearing for its biggest price increase in a decade. TSMC already collects production fees around 20% higher than competitors.
  • Some TSMC clients welcomed the development as this could prevent firms from placing orders for more chips than needed, but some were concerned if they would be able to pass the additional costs to customers.
  • Other producers have also repeatedly pumped up prices, citing higher material and logistics costs, and the supply issues brought about by the chip shortage that started in late 2020.
  • Analysts expect the strong demand to spill over into 2022, and developers are likely to negotiate to pass the increases to device makers, which could also be passed on to the end-users.

TSMC Chief Executive C.C. Wei in July said the company’s pricing is strategic, “not opportunistic.” 2230 is down 1.27%.