Chip prices are going up, and electronics prices may soon follow. That’s according to a report from TheStreet, which cites industry sources. TheStreet says that the cost of chips and other electronic components is on the rise, and that this trend is likely to continue. TheStreet says that this increase in costs is likely due to a number of factors, including increased production costs for chip products, competition from other industries, and the global economic recession. While it’s not yet clear how widespread these increases will be, it’s likely that they will have a significant impact on consumer spending. If Chip prices continue to rise at an alarming rate, it could lead to a decrease in sales for electronics products overall.
Taiwan Semiconductor Manufacturing Co. Increasing Prices
TSMC, the largest chip maker in the world, plans to increase its price by as much as 20% later this year or by early next year, according to a report from WSJ. Thankfully, most advanced chips made with processes under 16 nanometers will only go up by 10%, while older chips will see a more considerable 20% increase.
Many companies, including Apple, AMD, and Qualcomm, rely on TSMC. If these companies see a price increase of 20%, we can expect at least some of that increase to be passed to consumers at some point, making our devices even more expensive.
The company’s 7-nanometer chip manufacturing process is responsible for the AMD Ryzen 5000 processors used in the PlayStation 5 and Xbox Series X game consoles. That could leave Microsoft and Sony forced to raise the prices of their consoles or start making them at a loss.
Apple is another company that relies on TSMC. With rumors of the iPhone 13 already circulating, it’ll be interesting to see if Apple can keep the price around the same as current models or if there will be a jump there as well.
Car prices could even be affected by this increase, as they rely on older chips made with manufacturing processes that’ll see a 20% price increase. It’s already challenging to find some new cars, and now the ones out there could cost more.
Why is TSMC Raising Prices?
According to the report, TSMC is raising the price to help drive down demand, which is currently out of control.
It’s almost impossible to find a video card, PS5, or Xbox Series X, and it’s hard to imagine simply increasing the price of chips will decrease demand for these and other devices, but time will tell.
