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TSM ask equipment and material suppliers to reduce prices by 15%

tonyget

Member

Taiwan’s TSMC asking suppliers to reduce prices by 15%​


TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co (TSMC) is asking its suppliers to cut prices next year in order to boost profitability.

According to DigiTimes, TSMC is in discussions with its equipment and material suppliers on having them reduce their prices by 15% for 2022 in a bid to cut costs. The move could also help domestic suppliers, according to CNA.

Domestic suppliers have always offered lower prices than foreign companies, while at the same time TSMC, has been committed to increasing its proportion of locally procured materials and equipment. TSMC’s move to lower prices could create more opportunities for Taiwanese suppliers, CNA said.

Last year, TSMC purchased 60% of its materials and 44.8% of its equipment from domestic companies, said CNA, citing TSMC data. The world’s largest contract chipmaker plans to increase local material purchases this year to 60.5%, while domestic equipment acquisitions are expected to rise to 50%.

The latest move to lower supply prices comes on the heels of TSMC's announcement last week of a price increase for chips. Prices for its more advanced processes, such as its 7nm and 5nm chips, are expected to increase by around 7% to 9%, while prices for its more mature processes will be raised by about 20%.
 

Daniel Nenni

Admin
Staff member
Wow, a 15% reduction in equipment and materials cost and a 20% wafer price hike? That will be some financial windfall. I guess we should all buy TSM stock?
 

jackgdempsey93

New member
Hard to see ASML, AMAT or any of the major semicap guys given any discounts. I’d imagine it will be the small suppliers getting squeezed, if any.
 

Daniel Nenni

Admin
Staff member
Hard to see ASML, AMAT or any of the major semicap guys given any discounts. I’d imagine it will be the small suppliers getting squeezed, if any.

The amount of false news in the semiconductor industry is daunting. When we started SemiWiki in 2011 semiconductors were largely ignored by the media. Now we are click bait like everything else.
 

Portland

Active member
Part of tsmc strategy was to bottleneck suppliers from their competitors by reaching out to essential companies and people and buying out inventory.

It worked.
 

Barnsley

New member
The amount of false news in the semiconductor industry is daunting. When we started SemiWiki in 2011 semiconductors were largely ignored by the media. Now we are click bait like everything else.

Its also become highly politicised , to the extent that folk are posting out of nowhere and politicking on topics.
 

benb

Active member
I actually think this is true, and reveals a little secret of TSMC success, they pay quarters where others pay dollars for FAC EQP (the semi-custom equipment tailored to TSMC fab design used to supply DIW, slurry, chemicals, blended chemicals, and gases).

It's a bonanza for TSMC FAC EQP suppliers though, they have orders for years. So 15% cost down is a way to share in the bounty.

It may be a shot across the bow of Entegris and other big suppliers to the suppliers. US and JP companies, mainly. The opening bid in a negotiation. The US (and JP) vendors may have been looking to raise prices (as they are supply constrained) and TSMC is saying nuh uh.
 
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