Inflation will not leave electronic goods behind, which means that the new electronic goods available for the same price as the old ones will no longer be the same.
With the announcement that the semiconductor price will increase in 2023, it is only sensible that the customers buy the goods before the price rises in the holiday season.
The largest semiconductor foundry in the world, Taiwan Semiconductor Manufacturing Company (TSMC) in June announced an increase in price in 2023. After this announcement, Intel, too, followed the same. In addition, according to a report by DigiTimes, Qualcomm and Marvell have informed their customers that the chip prices will increase.
Most semiconductor companies are following this price increase trend in the value chain. Semiconductors being the core component in all our daily used devices, from cars to electric toothbrushes, consumers will be laden with price hikes.
Owing to these price hikes, the companies offering internet, entertainment, etc., will also increase the service fees as they pass on the increasing prices for the new equipment. However, the surge in the price is not unexpected.
The semiconductor industry has struggled with supply chain limitations since the demand increased during Covid. As a result, the foundries pushed the semiconductor customers to invest more into their future capacity or would lose priority and higher prices.
Integrated Device Manufacturers (IDM) having limitations and price rises of raw materials, Intel, Micron, Microchip, etc., are all facing issues with the price increase. According to research by Tirias, there is no solution to problems with semiconductor supplies.
The new capacity will be built to support more unique manufacturing nodes, where increasing the price for the product can be regained by higher profit margins. Until the new products are brought into the market on advanced process nodes, older nodes can be capacitated until demand reduces.
As the same chips have been used for almost ten years or even more in medical, automotive, industrial, and some consumer applications, it will take time to level the manufacturing needs for the older process nodes with the same capacity in manufacturing.