TSMC is undoubtedly one of the largest companies in the microcircuit industry. Its products are preferred by well-known brands, including Apple, which is a key customer of the Taiwanese semiconductor giant. This means that the attitude towards Cupertinos is somewhat different than towards other clients. Recently, there was news that TSMC intends to raise prices for the production process by 20%, but later it turned out that not for everyone. For Apple, the increase is only 3%. This was confirmed by industry analyst Lu Xingzhi.
The main question is why other TSMC customers such as MediaTek, NVIDIA and AMD are not on a par with Apple. Apple’s order volumes account for over 20% of the Taiwanese company’s revenues. However, the profit is less than 20% and the gross margin is below average and continues to decline. Other customers have higher than average order margins, but TSMC does not offer them these special offers. The analyst identifies three important points to pay attention to:
- Without large orders from Apple, TSMC will no longer be the leader in the semiconductor industry. As soon as the Cupertinians cease to be the main customer of TSMC’s advanced manufacturing process, the company will cancel its benefits.
- According to media reports, TSMC is raising prices by up to 20%. It is believed that this statement applies to large companies, and the final cost will depend on the volume of each customer’s order. By next year, each manufacturer will know exactly how much the prices for TSMC services will increase for him.
- TSMC has an important decision to make – whether it is wise to invest all its funds in research and development of advanced manufacturing processes with a small number of clients. If so, this will lead to high depreciation costs and worse gross margins. Another question is whether the demand in the semiconductor manufacturing process over the next 20 years will continue to focus on advanced processes as it has over the past 20 years.
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