Rising chip prices expected to continue into 2022: Report

San Francisco: The price of chips and devices, in general, are on track to rise into 2022 as the world’s biggest contract chipmakers are ramping up productions fees, which could end up impacting Apple and its chipmaker TSMC, media reports say.

TSMC, which makes chips for Apple, Nvidia, and Qualcomm, always had production fees around 20 per cent higher than its rival. But with the semiconductor shortage, some of its competitors already charge more than TSMC, citing Nikkei Asia, 9To5Mac reported.

Now, the company is expected to prepare its biggest price hike in a decade, which could impact a lot of tech businesses, the report said.

Industry sources told Nikkei Asia that TSMC is keen to weed out so-called double-booking, in which clients place orders for more chips than they need in hopes of securing production line space and support from contract chipmakers amid the global supply crunch.

This, in turn, has made it difficult for TSMC to grasp the “real demand” picture.

Counterpoint Research said that the rising cost of chips may even impact smartphone makers’ business strategies.

Last month, a paywalled report from DigiTimes suggested that Apple would be facing bigger bills from TSMC for its A-series and M-series chips.

TSMC is poised to raise its quotes including those for advanced sub-7nm process technologies, which will result in more manufacturing costs facing Apple and other major clients, according to industry sources.