Although there have been recent voices that the shortage of chip supply is about to end, judging from the current market conditions, the tight supply of chips may continue for some time. The international electronic business has learned that the world's top ten foundries, including TSMC, Samsung, UMC, and SMIC, have all reported that they will raise prices, ranging from 4% to 20%...

TSMC to raise foundry prices across the board next year

Several media reported last week that TSMC held an order meeting with customers in advance for 2023 on May 10, and informed that from January 2023, it will comprehensively increase the OEM prices of advanced and mature processes again, according to customers, products and order sizes. Different, the increase is about 5-8%. There is another version of the price increase mentioned in the report, that is, a 6% increase in all processes.

Supply chain news shows that this is the second time TSMC has reported a price increase in half a year. In August last year, this big foundry company announced a price increase across the board, with a price increase of about 10% for advanced processes and about 10-20% for mature processes. This is also the largest price increase by TSMC in the past ten years.

Japanese media quoted sources as saying that considering multiple factors such as inflationary pressures, rising costs and its production expansion plans, TSMC’s price increase is relatively modest. However, in response to the client's announcement that the communication process will increase in price in 2023, TSMC said on the 10th that it "does not comment on the price issue".

t is understood that Wei Zhejia, president of TSMC, said at the corporate briefing in April that production capacity will remain tight this year and will not lower OEM prices. TSMC is also optimistic about future expectations, saying that the goal of a long-term gross profit margin of more than 53% can be achieved. Industry insiders pointed out that TSMC's price increase in 2023 is moderate compared to the rest of the industry in 2022-2021.

Samsung plans to raise prices as a whole, up to 20%

According to relevant media reports, on the 13th local time, Samsung Electronics Co. is discussing with its foundry customers about raising semiconductor manufacturing costs by up to 20% this year, thus joining the industry-wide price hike to compensate for rising material and logistics costs. action.

According to the report, the overall price increase is about 15-20%, depending on the complexity of the foundry chips, and the traditional process chips will increase even more. The new pricing will be implemented from the second half of this year, and Samsung has completed consultations with some customers but is still in discussions with others. Samsung declined to comment on the price increase.

UMC may conduct a new round of price increases in the second quarter

Another major wafer foundry, UMC, plans to conduct a new round of price increases in the second quarter of 2022, with a price increase of about 4%. Before that, UMC has raised its foundry quotations almost every one or two quarters since 2021.

According to UMC’s first-quarter financial report, UMC’s revenue in the first quarter was NT$63.42 billion (approximately US$2.22 billion), a year-on-year increase of 34.7% and a month-on-month increase of 7.3%; the net profit attributable to the parent company was NT$19.81 billion (approximately 692 million US dollars). US dollar); operating profit margin was 35.2%; gross profit margin increased by 4.3 percentage points quarterly to 43.4%, an increase of 16.9 percentage points over the same period last year.

UMC pointed out that although the demand for specific applications such as personal PC/laptop and smart phones has weakened, the demand for automotive, industrial, Netcom, and cloud computing is still tight. It is expected that the growth of foundry manufacturers will exceed 20% this year.

In addition, at the legal meeting at the end of April, Wang Shi, general manager of UMC, said that UMC's capacity utilization rate reached 100% full load in the first quarter, and it is expected that it will continue to maintain 100% in the second quarter, and the overall production capacity will increase by about 4.5% quarterly. The average selling price of products increased by 3% to 4%, and the gross profit margin reached 45%. Some industry players believe that UMC's emphasis on full production lines is also a signal that implies price increases in the second quarter, because UMC has gradually raised prices since 2021.

In November 2021, UMC said that the increase in long-term customer quotations will take effect from January 2022. At the end of December 2021, UMC once again issued a price increase notice, and from March 2022, it will increase the foundry quotation of all products by about 5-10%.

UMC declined to comment on rumors of a price increase.

SMIC: Negotiate price adjustment with customers

Compared with the price increases of TSMC, Samsung, and UMC, the domestic foundry leader SMIC is more cautious about price increases. Zhao Haijun, co-CEO of SMIC, also talked about the company's OEM price increase at the Q1 quarterly performance briefing.

Zhao Haijun, CEO of SMIC, said that at present, "prices are increasing in all aspects, and the prices of raw materials with large price increases are even more than 30%." On the whole, the price increase of these materials will eat at least 10% of SMIC's gross profit margin. , the cannibalization of performance by high costs will be especially reflected in 2022, because the materials used in 2021 are still the batch before the price increase.

But Zhao Haijun said that "we are not exactly the same as our peers" in terms of price increases. He pointed out that although SMIC is also negotiating price adjustments with customers, it has not announced a unified price increase. "The principle is to negotiate friendly with customers, and then consider long-term strategic cooperation. Because the company's production capacity is growing rapidly, we must work with customers with development potential for a long time, and customers must also make profits and have enough funds to invest in new products and new products. Research and development, so as to achieve a long-term win-win situation, rather than see who earns more in the short-term."