According to sources at IC design companies, TSMC has informed clients of a 10% price increase for its sub-16nm process manufacturing, with the higher rates set to take effect in 2022.
According to the sources, TSMC will soon start raising prices for orders that will be filled starting in December.
According to the sources, TSMC will also increase its quotations by as much as 20% for process technologies with a 16nm and higher resolution. The new rates will be reflected in contract bids for fresh orders beginning in December.
In response, TSMC stated that it does not comment on reports regarding its foundry quotes.
Market watchers predict that the increased revisions to TSMC’s foundry quotations will start improving the foundry’s gross margin and profit performance in the fourth quarter of 2021. The observers said that higher bids for its advanced-node production will particularly help its margins and profitability.
In the second quarter of 2021, TSMC saw sales from 7nm and other cutting-edge process technologies make up as much as 49% of its overall wafer revenue.
According to the sources, TSMC informed customers in March that price concessions for all orders placed until 2022 will be canceled, which is viewed as a form of price increases.
According to the sources, other foundries including United Microelectronics (UMC) and Powerchip Semiconductor Manufacturing (PSMC) have already started a number of price increases that will begin in the second half of 2020. Earlier last year, PSMC Chairman Frank Huang said that pure-play foundries were simply boosting their quotations to fair and reasonable levels.
According to reports, UMC will raise their estimates once more in September, November, and January 2022, particularly for the 28nm and 22nm process technologies. In January 2021, UMC expects its quotations for 28nm processes to range between $2,800 and $3,000.
According to the sources, TSMC had originally planned to freeze its prices for 28nm processes but has now changed its mind and now plans to increase the prices to about US$3,000 starting in January 2022.
Industry insiders claim that Globalfoundries and Semiconductor Manufacturing International (SMIC) of China are also increasing their foundry quotations, notably those for 28nm processes, in line with Taiwan’s pure-play foundries.
