After a year with problems in the supply of components for semiconductors, Apple and other companies went through some pressure to meet the demand generated by their products. The high demand caused TSMC, the world’s largest semiconductor smelter, to announce last year an increase in its rates for the manufacture of microcomponents. Today, reports indicate that Apple accepted the new rates.
According to UDN reports, Apple did not agree with the 6% increase proposed by TSMC in 2023 for the production of 3 nanometer wafers, an essential component for the future A17 Bionic from the iPhone 15 Pro. Like Apple, NVIDIA was waiting to be able to negotiate a lower price with TSMC.
TSMC and an announced price hike
According to TSMC executives, the Taiwanese firm is requesting this readjustment due to the impact of inflation on the semiconductor manufacturing process. Labor, electricity, materials and the capacity to expand production to meet demand have increased their prices, a measure that impacts the final cost of each processor.
TSMC’s plan was to increase 8-inch wafers by 6%, while 12-inch wafers would rise between 3 and 5%. In recent years, the production of processors with components under 5 nanometers has increased the challenges of mass production, impacting total profits.
Apple depends on TSMC
In the case of Apple, the argument they have used to negotiate their position against the rise in prices at TSMC is that of representing 25% of the Taiwanese factory’s income. However, the foundry’s ability to meet recent demands for 5- and 4-nanometer Bionic processors still represents a huge level of dependency on the iPhone brand.
Currently, TSMC covers 53.8% of foundry supply, far surpassing Samsung, UMC, GlobalFoundries, SIMC and others. In addition, it is the most requested form by partners such as AMD, Nvidia, Qualcomm, Intel, MediaTek and other technology companies for the mass production of chips.
By 2023, TSMC expects to be a key player in the semiconductor industry in the automotive, data center and high-performance computing sectors. While that path is taking shape, TSMC has a high demand from companies that still require mass production of processors to satisfy their own production.
Last year, the Taiwanese government decided to ensure the production of components by transferring the water used in rice fields for use in semiconductor foundries.