04 Mar 2021 -
 General

IC design houses passing on production cost increases to clients

Rising foundry and backend quotes are prompting IC design houses to make efforts to pass on higher production costs to customers, reports DigiTimes.

The fabless firms are under pressure to raise their chip prices, as their foundry and backend partners are all raising their contract-manufacturing quotes amid tight capacity, says the report. Taiwan’s fabless chipmakers have moved to negotiate with their clients about raising prices to reflect the rising manufacturing costs, the sources noted.

Taiwan-based MCU and analog IC specialists have already managed to raise their chip prices, adjustments that will take effect starting from the second quarter, the sources indicated.

Production lead times at Taiwan-based backend houses have been extended to 1-2 months from 1-2 weeks previously, the sources added. Rising backend quotes already began to weigh down some fabless chipmakers’ revenues in January, the sources said.

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