The problem of chip shortage has plagued the semiconductor industry for more than a year, and the current foundries are basically fully loaded. Since the supply is in short supply, the price increase is normal. Samsung, GlobalFoundries, SMIC, UMC, and other foundries have already increased their prices. TSMC‘s current structure is still relatively stable, but the foundry prices will also rise next year.
According to Counterpoint statistics, since the first quarter of 2020, the foundry costs of 22/28nm and higher mature nodes have risen by 25%-40% and will continue to rise by 10%-20% in 2022. Relatively speaking, the foundry cost of advanced technology is inherently high, so the increase is not large. TSMC’s average price increase for the 6/7nm node in 2022 is only 5%, while the 5nm node’s foundry prices have actually fallen as the production capacity ramps up.
Counterpoint believes that the global chip shortage will begin to ease by the end of 2021, especially in DRAM and NAND. However, the supply of logic ICs produced by mainstream and mature nodes will still be in a tight supply state, and it may not reach a supply-demand balance until the middle of 2023. For foundry customers, the impact of a 10% to 20% increase in wafer costs is much greater than the impact of supply shortages on their businesses. These costs will eventually be transferred to the end customers.
“Logic ICs (the chips largely fabricated in foundries for smart devices) account for 30-40% of the total BoM (Bill of Material) cost depending on the selling price. Assuming other component and assembly costs are stable moving into 2022, logic IC price increases will be added to the total product cost for smartphone ODMs/OEMs.”