Apple supplier TSMC faces chip material price hikes into 2023

Japanese chemicals supplier Showa Denko K.K. – a vital supplier to Apple-supplier TSMC – expects to further raise prices and cut back unprofitable product lines as it grapples with a barrage of economic challenges confronting the $550 billion semiconductor industry.

Takashi Mochizuki and Yuki Furukawa for Bloomberg News:

That’s on top of at least a dozen hikes already this year, reflecting Covid-19 supply snarls, surging energy costs from the war in Ukraine and the yen’s dramatic weakening, Chief Financial Officer Hideki Somemiya told Bloomberg News in an interview. The situation is unlikely to significantly improve until at least 2023, he added.
Tokyo-based Showa Denko, which supplies essential chip fabrication materials to the likes of Taiwan Semiconductor Manufacturing Co. and Infineon Technologies AG, has been forced to drastically increase the cost it passes on to customers, Somemiya said. Because it’s a key supplier of the chemicals used early in the production chain by chipmakers and other manufacturers like Toyota Motor Corp., its price hikes could potentially squeeze margins or pressure customers to follow suit.
In addition to rising prices of raw materials and natural resources, Showa Denko’s Somemiya said the weakened yen poses another challenge. The Bank of Japan has grown increasingly isolated in its commitment to an ultra-easy monetary policy, pushing the yen to its lowest level against the US dollar in 24 years.

MacDailyNews Take: As TSMC’s largest customer, expect Apple to get the best deal amidst rising prices.
Please help support MacDailyNews. Click or tap here to support our independent tech blog. Thank you!
Shop The Apple Store at Amazon.

The post Apple supplier TSMC faces chip material price hikes into 2023 appeared first on MacDailyNews.