Electronics pricing might become even worse than it currently is. A new report suggests that some chip manufacturers have increased their products’ pricing by 10% to 30% since the start of Q2 2021. Moreover, the prices of IC products have also been significantly increasing, in some cases by dozens of times.
With the start of the second quarter of 2021, over 30 companies, including UMC, SMIC, and PSMC, have reportedly increased their products’ prices by 10% to 30% due to rising raw material costs. Although TSMC isn’t mentioned in the report, the semiconductor company had already done something similar in January 2021, increasing the wafer pricing and terminating discounts.
The price increase varies depending on the type of product. For example, signal chain chips increased by 10% to 20%, while memory ICs and power management chips increase by up to 30%. All in all, the price increase averages about 10-20%.
The report also mentions that “the prices of some IC products have soared dozens of times,” making it harder for small and medium-sized businesses to stay afloat in these troublesome times. If the situation doesn’t improve over the coming months, some of these businesses will likely go bankrupt.
Prices of products should also increase proportionally to the number of chips it uses. If a product only uses a power management chip, the increase shouldn’t be that noticeable. However, if it uses multiple chips that have become more expensive, it’s only logical to see a more significant price bump.
The ongoing chip shortage has been devastating to the electronics industry. Cars, PC components, TVs, consoles, and other products have already been severely affected, but Sony’s and AMD’s CEO hope the situation will improve this year.