There Is A Shortage Of Automotive Chips, TSMC Is Planning To Raise Prices Again...

_{Due to the global shortage of semiconductors, global foundry manufacturers such as TSMC and UMC are discussing raising the foundry prices of automotive semiconductors by up to 15%. At the same time, as foundries have been willing to increase prices, global automotive chip manufacturers including Renesas, NXP, STMicroelectronics, Toshiba, etc. have already considered raising the prices of many products by 10% to 20%.}

_{There is a shortage of automotive chips, the generation factory will increase the price by up to 15%}

_{Pioneer International Semiconductor, a subsidiary of TSMC, the world's largest contract chip maker, is discussing with other Taiwanese manufacturers to increase the price of automotive foundry by 15%. These OEMs are considering another round of price increases mainly for automotive chips, because the global semiconductor supply shortage has given them the right to price.}

_{According to the report, Pioneer International Semiconductor, a subsidiary of TSMC that produces automotive chips, is discussing with other Taiwanese manufacturers to consider raising the price of automotive foundry by 15%. The new price increase plan is expected to be gradually implemented from the second half of February to March.}

_{The report also said that Taiwanese manufacturers such as Pioneer International Semiconductor, World Advanced and United Microelectronics (UMC) have successively expressed their willingness to increase prices to customers, including direct customers such as NXP Semiconductors and Japan’s Renesas Electronics, which seem to have received increases price news.}

_{For the above news, TSMC, Pioneer International Semiconductor, UMC, World Advanced and other manufacturers have publicly commented.}

_{This is not the first time TSMC has reported a price increase. More than a month ago, Taiwanese media reported that as the foundry production capacity has become tighter, TSMC, which previously stated that it will not follow up on the price increase, seems to intend to "change" and will cancel the discount for 12-inch foundry orders starting next year. It is equivalent to changing prices relative to customers. At that time, TSMC stated that it would not comment on market rumors and would not respond to price issues.}

_{It is understood that thanks to the strong demand for terminals such as power management ICs and logic chips, the current (as of December 14, 2020) TSMC's foundry production capacity is fully loaded from 7nm to 55nm, including 12-inch and 8-inch wafer generations. The utilization rate of industrial production lines is above 90%.}

_{OEMs are screaming, and automotive chip manufacturers have announced price increases}

_{Many Japanese media reported that due to the increased cost of foundry production capacity and the increase in raw material prices, global automotive chip manufacturers including Renesas, NXP, STMicroelectronics, and Toshiba have considered Increase the prices of many products. Although these chip manufacturers have their own manufacturing plants, not all products are produced by themselves, and many are entrusted to TSMC, UMC and other foundries.}

_{On the other hand, under the influence of the epidemic, the demand for chips including laptops, smartphones, and data center servers has increased. Starting from the second half of 2020, after the demand for consumer electronics picks up, it will begin to compete for wafer production capacity with automotive chips.}

_{The report pointed out that the global automotive chip manufacturers mainly include NXP, Infineon, Renesas, STM, TI, Bosch, etc. Among them, Renesas Electronics has requested price increases to car manufacturers in various countries. If Taiwanese companies in charge of foundry also decide to increase prices, the price of automotive semiconductors will inevitably rise further, and the prices of server and industrial equipment chips will be increased by an average of 10%. 20%. Toshiba has also begun to negotiate price increases with customers, mainly for products such as automotive power semiconductors.}

_{Toshiba said a few days ago that because of the high processing costs and material costs, it had to reflect them on the product price to customers. In addition, NXP, STMicroelectronics and other companies have also informed customers that they plan to increase by about 10% to 20%.}

_{Regarding the price increase, NXP pointed out that the price change is a fact, while others cannot be responded to. Although price increases such as automotive chips have occurred before due to rising costs, it is rare for many companies to increase multiple products together.}

_{According to the report, automotive chips are mainly produced in 8-inch fabs, including CMOS, MCU, MEMS, etc., which are indispensable parts for automobiles and electric vehicles.}

_{At present, the world's major 8-inch wafer fabs are mainly owned by manufacturers such as TSMC, UMC, and SMIC. From the analysis of wafer applications, in 2020, automotive chips will account for about 33% of global 8-inch wafer demand and about 5% of 12-inch wafer demand.}

_{TSMC: If production capacity increases, it will give priority to supporting automotive chips}

_{According to a report by Reuters last week, Germany, the United States and Japan have asked relevant departments in Taiwan to help persuade Taiwanese manufacturers to help alleviate the "core shortage" problem in the automotive industry due to the shortage of automotive chips.}

_{In this regard, TSMC responded on Sunday (24th) that if it can further increase its production capacity, it is willing to give priority to the production of automotive chips, and will continue to work closely with automotive electronics customers to support production capacity needs. Data shows that automotive chips account for only 3% of TSMC’s sales in 2020, far behind 48% of smart phones and 33% of high-end chips. Although in the fourth quarter of 2020, automotive chip sales grew by 27% compared with the third quarter, it still accounted for only 3% of total sales in the quarter.}