Smartphone prices could rise as TSMC raises chip fees

Smartphone prices could rise as TSMC raises chip fees

There was a time when smartphone prices were getting ridiculously high, and there didn’t seem to be any stopping that trend. Market dynamics and global events, just like the COVID-19 pandemic, however, did a minimum of put an interruption thereon or made cheaper but still capable phones more enticing to consumers. Unfortunately, another worldwide situation is causing havoc in multiple industries with rippling effects on product prices. One such unfavourable effect is going to be a foreseeable increase in smartphone prices next year now that TSMC, the world’s biggest semiconductor foundry, has announced its biggest price hike during a decade.

The fact that it took that long for Taiwan Semiconductor Manufacturing Co. to substantially raise its prices is nearly a touch of a miracle. But, the foundry has big customers like Qualcomm, Apple, NVIDIA, and more on its list and already charges 20% quite its rivals. Unfortunately, things aren’t wealthy for the industry as an entire, and TSMC is making its biggest price hike which will eventually affect the costs that buyers can pay.

Various factors have caused what some billed as a shocking announcement, including that other foundries have also increased their prices. Material costs and logistics expenses have pushed these semiconductor manufacturers to boost their fees, while device makers rushing to fill their chip supplies have forced TSMC and its competitors to push their pipelines to the limit.

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That is why TSMC’s price hike is additionally a technique to comb out double-booking customers. These clients attempt to secure production space and support by placing orders for more chips than they need, skewing figures that foundries need to urge a far better picture of market demand. With the worldwide chip shortage, that practice has become even more prevalent as manufacturers scramble to prioritise their devices.

Unfortunately, it still means consumers should expect higher prices soon. Customers have until October 1 to barter those increased fees, and large clients like Qualcomm, Apple, and NVIDIA will presumably do so. TSMC shall honour existing orders at the worth they were made, so those changes probably won’t be felt until next year.

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