TSMC, the largest chipmaker in the globe, is responsible for processors used by Apple and Nvidia as well as Qualcomm and some Intel products. According to The Wall Street Journal, the company is planning to increase the prices of its advanced chip products by approximately 10 percent and those for less advanced products by approximately 20 percent.
As chips are still scarce, semiconductor supply is becoming a more important aspect of major tech and automotive companies. The actual cost of the materials and processor costs are not the only factors that affect the price of smartphones, laptops and gaming consoles. A 10-20 percent increase in SOC and processor costs might not be the same as a rise in consumer prices.
However, we may see price increases for some of the world's most loved devices if we raise the prices of one of the most valuable and costly components of a device (for instance, the Qualcomm modem and the A14 SOC are two of the iPhone 12's most expensive components).
The Wall Street Journals report does not indicate whether Apple will be affected by price increases at TSMC or whether it will pass on the increased costs to its customers. TSMC is the only supplier that can make chips at the high-end level and in the volume required by Apple to produce its A-series or M-series chips for the iPhones, Macs and iPads.
Apple CEO Tim Cook also warned in its last earnings call that there could be silicon supply shortages for its upcoming iPhone and iPad models this fall, particularly for older, less-advanced chips.
Good news: The increased prices could actually alleviate some supply problems for TSMC by reducing the demand that has been driving the shortage of parts. It will also allow TSMC to continue raising money for ambitious investments, including spending $100 billion on 2023 to expand its capacity. This includes plans such as Arizona's $12 billion manufacturing hub and other projects. TSMC previously stated that there would be shortages in 2022, as part of its quarterly earnings report.
