Chipmakers are raising prices on semiconductors that go into cars and telecom equipment as they attempt to maneuver out of a squeeze created by soaring demand and limited foundry capacity, reports Nikkei Asia.
Japan’s Renesas Electronics, the Netherlands’ NXP Semiconductors, and Toshiba are among those wanting to raise prices. Chipmakers have not disclosed what clients are subject to the higher prices, says Nikkei, but it appears Toyota Motor-affiliated Denso and Germany’s Continental, a supplier to Volkswagen and other automakers, are among them.
“The semiconductor industry has outsourced certain processes to a very limited number of [contract manufacturers], and this is very much a structural issue,” Hidetoshi Shibata, CEO of Renesas Electronics, told the electronics press. “Factors such as ups and downs of automobile production have given a final blow, and I would like to start discussing with automobile customers what kind of initiatives are needed.”
Nikkei further stated that, overseas chipmakers, including NXP, the world’s second-largest supplier of automotive chips, and Switzerland’s STMicroelectronics, have also demanded that clients pay about 10% to 20% more.
Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, and Taiwanese peers are also considering another round of price increases mainly on automotive chips, Nikkei learned Monday, as a global semiconductor shortage puts pricing power firmly on their side, says Nikkei Asia
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