TSMC to increase it chip prices

Posted on Thursday, May 29 2008 @ 01:41 CEST by Thomas De Maesschalck
Taiwanese chip foundry TSMC is considering to raise prices for its higher-end chips as raising costs are squeezing the firm's profits.
As the industry's leading and oldest player, with more than three times the sales of closest rival, United Microelectronics Corp, TSMC has stressed in recent years that its products should command a premium over its peers.

"Average selling prices have been falling and profits have been under pressure, and we have to work together to create value," Jason Chen, a company vice president in charge of global sales and marketing, told a TSMC technology symposium.

He said price changes would be mostly for chips made by advanced process technology, but would not say how big they would be or when they would occur.

He did not say when TSMC last raised prices.

"We face some structural profit pressure. In the short term, we also face pressure from inflation and oil prices," Chen said.

Consumer prices in Taiwan, where TSMC is based, rose 3.86 percent in April, with core inflation up 3.1 percent -- a nine year high.

BNP Paribas analyst Eric Chen said TSMC's customers could accept higher prices if TSMC provided better services and higher-performance chips.
This move could hurt AMD and NVIDIA a bit as both firms use TSMC to produce most of their high-end GPUs.

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Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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