The price increase predicted by TSMC could be the largest in a decade. (.)
The global chip shortage could have a ripple effect as Apple consumers may have to fork out a premium for their choice of gadgets. According to a report by Nikkei Asia, Apple’s main chip supplier TSMC is raising chipset prices to cushion the effect of industry-wide inflation triggered by the shortage of fleas.
The price hike predicted by TSMC could be the biggest in a decade, according to the report.
The company’s current chip prices are nearly 20% higher than those of its direct competitors. Now, with smaller foundries raising their own prices and TSMC’s commitment to invest $ 100 billion over three years, TSMC has decided to maintain its premium prices and pass the additional costs on to its customers.
TSMC hopes to prevent customers from ordering more chips than they need in an effort to gain contract chipmakers space on the production line and additional support. TSMC customers will need to negotiate specific manufacturing terms before the company implements the price hike from October 1.
The company is still processing existing orders, suggesting consumers would feel the real impact of higher prices next year as production capacity increases and existing orders are filled. Sources from Nikkei Asia said chip developers like Qualcomm would pass TSMC’s hike on to manufacturers like Apple. TSMC also supplies its M1 and A14 chips directly to Apple.
Apple CEO Tim Cook previously warned that the global chip shortage would affect iPhone production. Speaking on an analyst call following the company’s June quarter results, Cook said MacBook and iPad sales had already been hit by the shortage. He also warned that revenue growth would slow down as a result.
The Cupertino-based tech giant told investors in the June quarter that the chip shortage is expected to dampen sales by up to $ 4 billion.
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