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Chipmakers Are Finally Raising Prices Amid the Global Chip Shortage

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(Image credit: Shutterstock)

Chipmakers might finally be cashing in on the global chip shortage. Times-Taipei News reported last week that since the second quarter of 2021, "more than 30 semiconductor companies have issued price adjustment letters, with product price increases ranging from 10% to 30%," according to a translated version of the report.

Times-Taipei News said UMC, SMIC, and Power Semiconductor Manufacturing Co. are among the companies adjusting their prices. The reasons cited for those adjustments vary, but Rockchip reportedly said, "the cost of wafers, printed circuit boards, and packaging and testing have risen sharply to varying degrees."

The price adjustments seem to vary by chip type. The report claimed that signal chain ICs saw price increases between 10% and 20%, for example, while the price of power management ICs was said to have risen between 10% and 30%. Some memory chips were also said to have risen in price by as much as 20%.

Those already steep increases might actually be tame compared to other adjustments. Times-Taipei News said that "the price of some IC products has soared dozens of times at present, which has caused difficulties in the production and operation of small and medium-sized enterprises," per an "industry insider."

There is at least one major exception to this trend: TSMC. According to the report, the company hasn't issued any price increases, which means the world's largest chipmaker is holding the line. Or at least it's presenting that facade—its decision to end price discounts will have the same effect on the cost of its chips.

The effects of these price increases will probably still be felt throughout the industry, even without TSMC. Power management chips are nearly ubiquitous, for example, which means a wide variety of products could see their prices rise as well. That effect could also be compounded in products that rely on multiple types of chips.

DigiTimes also reported today that DRAM and NAND prices are expected to rise through the third quarter due to strong demand across various segments, panic buying spurred by the Chia cryptocurrency's ascendancy, and limited supply of NAND flash device controllers leading to higher prices for those chips.

The report said that DRAM memory contract pricing rose "over 20%" in the second quarter, with "prices for PC DRAM chips hiking more than 25%," per anonymous sources. DRAM contract prices are expected to rise an additional 10% to 20% in the third quarter, while NAND contract prices could rise by as much as 10%. 

AMD CEO Lisa Su has made it clear she doesn't think people should be too worried about the chip shortage. But at least in the short term, it's going to be hard to find many products, from the PlayStation 5 to the latest graphics cards, and now it seems many of the devices that do manage to make it to consumers might cost more.

  • InvalidError
    Power management chips are nearly ubiquitous
    Quite the understatement when practically every major ASIC on a board requires its own and the support circuitry around them often needs a few more on top.
    Reply
  • Giroro
    We all need to take a deep breath, and relax.
    Everything is going to be ok.
    This summer is going to be a fantastic time to finally get outside and enjoy the sunshine and nature.

    We don't need to keep panic buying everything all the time. Its not worth it.
    Reply
  • InvalidError
    Giroro said:
    We don't need to keep panic buying everything all the time. Its not worth it.
    Exactly what I would say if I wanted to panic-buy stuff myself to hopefully reduce competition :)

    Memory for my new PC is already in-transit, now I have to settle on a motherboard before already limited choices get even more limited and prices on whatever crap is left shoot up.
    Reply
  • spongiemaster
    Giroro said:
    This summer is going to be a fantastic time to finally get outside and enjoy the sunshine and nature.
    Maybe where you live. Thanks to global warming, summers here are getting hotter and hotter every year. 90+ degrees with 30%+ humidity is absolutely miserable weather to be outside doing anything. I have to keep buying computer equipment to mine so I can afford the higher electricity bills to air condition my home which makes my home hotter. It's a vicious cycle I can't get out of! AAHHHHHHH!!!!
    Reply
  • bigdragon
    Due to COVID-19, my supply of "I care about this" has run out. Due to logistics complications incurred by COVID-19 shortages, I am unable to restock "I care about this" feelings. Chip vendors, GPU AIBs, car dealers, game console manufacturers, SSD vendors, home improvement stores, and other related industries will need to adjust to my new normal. The cost of "I care about this" feelings has also jumped by 600% due to an internal motivation shortage.

    Hey, if businesses can parrot this constantly now, so can we. Blame COVID-19 for everything you don't feel like doing or that is going wrong. Didn't buy that new CPU? COVID-19! Just got the medium meal instead of the large? COVID-19! Only one game this month instead of several? COVID-19! Cancelled Disney+ or Netflix? COVID-19!

    All this chip shortage drama finally got me to spend time overclocking RAM. I hate tinkering with all those settings.
    Reply
  • Eximo
    And so it came to pass the resource wars of the 2020s...
    blah, blah, blah, cursed earth and mega cities.

    Actually I keep forgetting, this is the year of Johnny Mnemonic. So prepare for the black shakes as your cell phone infects your blood or something.
    Reply
  • spongiemaster
    bigdragon said:
    Due to COVID-19, my supply of "I care about this" has run out. Due to logistics complications incurred by COVID-19 shortages, I am unable to restock "I care about this" feelings. Chip vendors, GPU AIBs, car dealers, game console manufacturers, SSD vendors, home improvement stores, and other related industries will need to adjust to my new normal. The cost of "I care about this" feelings has also jumped by 600% due to an internal motivation shortage.

    Hey, if businesses can parrot this constantly now, so can we. Blame COVID-19 for everything you don't feel like doing or that is going wrong. Didn't buy that new CPU? COVID-19! Just got the medium meal instead of the large? COVID-19! Only one game this month instead of several? COVID-19! Cancelled Disney+ or Netflix? COVID-19!

    All this chip shortage drama finally got me to spend time overclocking RAM. I hate tinkering with all those settings.
    You sure wrote a lot for someone who doesn't care. In fact, you post in practically every thread about shortages and GPU's about how "you don't care." If you don't care, then stop posting about it.
    Reply
  • Eximo
    Tis the topic of the day. Almost every build thread is: You got a GPU? Have tons of cash?
    Reply
  • bigdragon
    spongiemaster said:
    You sure wrote a lot for someone who doesn't care. In fact, you post in practically every thread about shortages and GPU's about how "you don't care." If you don't care, then stop posting about it.
    No, I don't post in every shortage thread saying that I don't care. Most of my posts have either been advocating for solutions to cut out the miners and scalpers, or reminding people that products have uses outside of gaming and mining. Thanks for taking the focus off the problem of just-in-time not-in-time logistics and companies using covid as an excuse for everything.
    Reply
  • Rogue Leader
    Reminder to ALL. Respect for your fellow commenters is compulsory. If you are here to attack people you will be asked to leave.
    Reply