TSMC Chief Blames Low-End Chips For Hindering Supply Chain; Sees Higher Prices For High-End Chips

  • Taiwan Semiconductor Manufacturing Company Ltd TSM CEO C.C. Wei warned that an endemic chip crisis costing anywhere from $0.50 to $10 is slowing down the $600 billion semiconductor industry, Bloomberg reports.
  • The ongoing crisis of such low-end chips hindered production in critical segments of the supply chain, he said.
  • ASML Holding N.V. ASML struggled to procure $10 chips for its extreme ultraviolet lithography systems.
  • Also Read: US $52B Chip Funding For Intel, TSMC, Samsung Will Cost Them China Ambitions: Report
  • He expressed TSMC's inability to meet the demand for low-end chips at legacy factories.
  • TSMC acknowledged building new plants suggesting higher prices for mature chips in the months ahead. The new plants included a new 28-nm factory in China. 
  • He attributed the crisis to the automakers adding more features to cars and additional smartphone features.
  • The production costs also increased due to more countries racing to build domestic fabs.
  • While demand is generally dwindling, logistics jams and chronic component crises continue to plague some industry players like Applied Materials, Inc AMAT and Nvidia Corp NVDA.
  • Taiwan Integrated Circuit design houses already looked to renegotiate with TSMC on foundry prices for 2023.
  • Given the slowing demand for products like smartphones and PCs, clients found it difficult to cope with TSMC's price hike.
  • Analysts saw products using more advanced chips like GPUs (graphics processing units) and high-end CPUs (central processing units) going up in price, unlike smartphones which saw lower demand.
  • Price Action: TSM shares closed lower by 2.23% at $82.85 on Monday.
Market News and Data brought to you by Benzinga APIs
Posted In: NewsTechMediaBriefs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!