Источник изображения: TSMC

TSMC is not going to profit from the lack of production capacity, raising prices

The Taiwanese media regularly report on the intentions of UMC and a number of other contract manufacturers to raise prices for their services due to a sharp increase in demand for services caused by the pandemic. The largest contract manufacturer in the world, Taiwan’s TSMC, tried to convince the public that it would keep prices unchanged.

Image source: TSMC

Image source: TSMC

The problem of lack of production capacity is especially pronounced in the segment of silicon wafers with a standard size of 200 mm. In the period leading up to the pandemic, specialized services market participants cut production lines for this type of insert. It was more profitable for them to switch to a standard size of 300 mm and more progressive technical processes. The pandemic has spurred demand for laptops, requiring power components and other products that are traditionally made from 200mm silicon wafers. The shortage caused a rise in prices for related services in a number of TSMC’s competitors.

TSMC itself, as the company’s management explained at a quarterly conference, will not raise prices for processed silicon wafers. The company builds up equal and long-term relationships with clients, and the desire to cash in on short-term deficits clearly does not contribute to strengthening the counterparty’s image. TSMC will not agree to such measures.

Analysts also asked TSMC representatives whether the general nervousness of the situation caused the company’s customers to want to resort to excessive purchases of components, as was the case in the first months of the pandemic. With TSMC’s main production lines already fully loaded, the additional increase in orders will only complicate matters. The management of the company said it is conducting outreach work with customers and organizing supply planning so that no one orders more than is required.

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