TSMC Lowers Semiconductor Chips Pricing: Will Smartphones, Smart Cars, Or Electronics Get Cheaper?

TSMC, one of the leading manufacturers of semiconductor chips, has lowered its asking price. The Taiwan-based company supplies chipsets and SoCs to smartphone giants such as Apple, Qualcomm, Huawei, and several other electronics manufacturers.

After experiencing a severe chip shortage, the electronics industry was surprised to hear that TSMC has slashed the factory-level price of some of its chips by about 30 percent. Let's see how this could impact smartphones, smart cars, and millions of other electronic industries that need semiconductor chips.

TSMC Reduces Asking Price Of Some Semiconductor Chips

TSMC has been on a roller coaster ride. As the world's hunger for electronics continues to rise, the Taiwan-based chipmaker hiked the per-wafer selling price for advanced semiconductors of 5 nm or smaller sizes by about 12 percent in July.

Even though the majority of industry experts expected TSMC to increase the price further, the company surprised the world with a major reduction in the "foundry prices" by about 30 percent. It is important to note that TSMC continues to charge a premium for the 5nm and lower-sized semiconductor chips. These chips are primarily meant for smartphone SoC (System on a Chip).

TSMC has reduced the asking price for the 8-inch wafers, which generate chips that are used in segments such as Display Driver ICs (DDI), CMOS Image Sensors (CIS), and Power Management ICs (PMIC).

Which Industries Will Benefit From TSMC Slashing Wafer Prices?

TSMC currently holds a 60 percent share of the global foundry market, which means it is the dominant player. However, even this company isn't immune to fluctuations in demand due to the recent slowdown in the semiconductor market.

TSMC cut its revenue forecast for the full year last month. This was a strong signal the company would try something to boost sales.

The reduction in the foundry price of the 8-inch wafers could benefit smartphone manufacturers directly as chips obtained from these wafers are used for displays, cameras, and even battery charge management. Additionally, cheaper chips could also benefit smart cars and other electronics as they too need the abovementioned components.