Rumors regarding a potential hike in chip prices by Apple Inc. AAPL supplier Taiwan Semiconductor Manufacturing Co. Ltd. TSM are flying thick and fast. This hints at higher prices for iPhones, as Cupertino prepares to launch the next iteration of its flagship product, widely referred to as the iPhone 13.
What Happened: Taiwan-based TSMC, the largest contract chip manufacturer, is planning to hike chip prices by as much as 20%, the Wall Street Journal reported, citing people familiar with the matter.
The prices of advanced chips will likely be raised by 10%, while that of less advanced chips used by automakers will go up by 20% or more, the Journal said.
The speculated price hike comes amid a supply crunch that has come to plague the global semiconductor industry.
The prices hikes, according to the report, are likely to come into effect later this year or next year.
Related Link: Why Apple Is A 'Top Tech Name' To Own Right Now
The price hike is very likely true and the benefit to TSMC will be seen in its financial results for the first quarter of 2022, Bernstein analyst Mark Li said, commenting on the rumors.
"We believe TSMC notified customers a few days ago that all wafers starting on Oct 1, 2021 and onwards will have a price hike of ~20% for mature nodes and 8-10% for leading ones," the analyst said.
Wafer production time is about three months, he added.
iPhone 13 to See Price Inflation? It has now emerged that Apple is planning to raise prices of the iPhone 13 models due to the pass-through effect of the higher chip costs, McRumors reported, citing Digitimes.
Apple is TSMC's biggest client, with the tech giant's orders accounting for over 20% of the foundry's total wafer revenue. Chips supplied to Apple will likely be hiked by 3%-5%, the report said.
This way Apple can circumvent any impact the chip price hike can have on margins, it added.
Price Action: Apple shares were edging down 0.22% to $148.03 and TSMC shares were down 0.38% to $116.59 at last check Thursday morning.
Related Link: Apple Supplier TSMC Plans To Build Advanced Chip Packaging Plant In US: Report
Photo: Matt Seymour via Unsplash
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