TSMC cost increases Apple may face further increases in chip prices

Apple could face further increases in chip prices as supplier TSMC grapples with additional costs, according to Bloomberg.

Japanese chemical company Showa Denko, which supplies TSMC with key chip-making materials, is now being forced to raise prices significantly due to a global shortage of chips. Other component manufacturers and material suppliers are taking similar moves in the semiconductor industry amid a broader price squeeze.

As a key supplier early in the production chain, Showa Denko’s price hikes are expected to tighten margins and force customers such as TSMC to pass on increased costs to customers, including Apple. It is reported that the situation is unlikely to improve significantly until at least 2023.

In May this year, Bloomberg reported that TSMC is warning its customers to raise prices significantly. Prior to that, chip prices rose sharply by 20 percent in 2021, which was said to be the sharpest chip price increase in a decade.

Last year, Nikkei Asia said that Apple may be forced to pass on rising chip prices to its customers.