Chip prices likely to increase into 2022

Chipmakers, analysts predicting strong demand, higher prices into next year

by 9SIX

The costs of semiconductors and certain electronics are expected to climb into 2022 in response to price hikes by chipmakers.

Nikkei reported that chip prices have been trending upward since the fourth quarter of 2020 amid the global semiconductor shortage. Several factors are affecting prices, including increased material and logistics costs, in addition to device makers competing to get their hands on sufficient chip supplies, the report said.

Taiwan Semiconductor Manufacturing Co (TSMC) announced at the end of August it would be upping the prices of some of its products by as much as 20%, while smaller rival United Microelectronics has increased its prices several times since the end of last year.

Sources told Nikkei that TSMC is eager to reduce double-booking, where clients order more chips than they need to try and secure production line space and support from chipmakers. Double-booking makes it harder for TSMC to gauge “real demand,” the sources said.

Analysts said TSMC’s price increases will be more noticeable next year due to the fact that TSMC is still filling existing orders. However, overall chip prices have already been going up, per Nikkei.

The outlet cited Counterpoint Research, which found chip developers are already paying 40% more for older process technology chips that are in the shortest supply. Meanwhile, electronics makers are seeing the price of microcontroller chips increase as well.

Prices along the entire chip supply chain have been trending upward, from basic materials to chip packing and testing services, Nikkei reported. Chipmakers and analysts are predicting the strong demand and higher prices will continue into next year.

Source: taiwannews

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