TSMC, the world’s largest contract chip manufacturer, is increasing prices in most of its production processes. According to the report shared by Culpium, this attack is a response to the recent price increases of memory manufacturers.

The activity in the memory chip market attracted attention after the intense demand from the artificial intelligence sector. These price increases by TSMC have the potential to affect many different branches, including mature production technologies such as 7 nanometers.

Wide Range Price Increase in Production Processes

TSMC management requests sales and business development groups to find ways to increase prices. This decision of the company is in line with similar strategies followed by other memory manufacturers such as SK hynix and Samsung.

Company groups are directed to associate the increases with TSMC’s strength in production technology and the price offer it offers. Although price increase expectations for 3 nanometer production processes were previously on the agenda, new information shows that this process also includes older technologies such as 7 nanometer.

Customers Encountered Unexpected Increases

TSMC’s sweeping price increase caused consternation among the company’s existing customers. These increases, which may vary between 5 percent and 10 percent depending on the sources, have already started to be implemented.

Industry analysts predict that these price adjustments could increase TSMC’s gross margins by as much as two percentage points. Providing services to giant technology companies such as NVIDIA, Apple, AMD and Intel, TSMC has a strong bargaining power thanks to its dominant position in the sector.

Making a statement on the subject, TSMC stated that their pricing strategies are strategic, not opportunistic. While the company declined to comment on pricing details, it stated that they would continue to work closely with their customers.

What do you think about this price policy change of TSMC?