Tokyo-based Showa Denko K.K., 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, Chief Financial Officer Hideki Somemiya said.
TSMC is expected to pass on increased costs to their own customers, including Apple. The situation is unlikely to significantly improve until at least 2023, said Somemiya.
Showa Denko provides chip fabrication materials used early in the production chain to TSMC and has been forced to drastically increase its prices during the global chip shortage. Other component makers and material suppliers are making similar moves.
Showa Denko Chief Financial Officer Hideki Somemiya said “A big theme this year common to all the players in the materials industry is how much cost burden we’d be able to convince customers to share with us. The current market moves require us to ask twice the amount we had previously calculated.”
In May, it was reported that TSMC was warning its customers of a considerable price increase. This came after a considerable 20% price hike in 2021.
The price increases could force Apple to raise its iPhone 14 prices this fall.