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Key TSMC supplier expects more price increases for chip components

By Cookie Monster - on 6 Jul 2022, 12:00am

Key TSMC supplier expects more price increases for chip components

A key TSMC supplier is expecting more price hikes for chip components. 

Bloomberg reports that Japanese chemicals supplier Showa Denko K.K will continue to raise prices for chip components as it struggles with Covid-19 supply disruptions, rising energy costs from the Ukraine conflict and the weakening yen currency. Showa Denko does not expect the situation to improve dramatically until at least 2023.

As Showa Denko provides critical chip fabrication materials to TSMC and other major semiconductor players, the price hikes are likely to erode margins and pressure them to pass on the costs to consumers. Tokyo Securities analyst Hideki Yasuda says consumers need to be prepared to pay more for electronics products.

Samsung is reportedly discussing with its customers about raising chipmaking prices as much as 20% this year. The new prices are expected to be enforced from June. Nikkei Asia claimed in September 2021 that  increasing component prices would lead to more expensive phones and PCs this year.

With Apple preparing to launch its iPhone 14 lineup in September, there is a possibility that the new phone models could cost more. Apple already raised prices of the iPhone 13, iPads and Apple Watches in Japan.

Source: Bloomberg

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