Japanese media are reporting that chipmakers such as Japan’s Renesas Electronics and the Netherlands’ NXP are raising prices for semiconductors used in cars and telecoms equipment in a rare move to cope with a shortage of wafer supply caused by soaring demand and limited foundry capacity.
The report cited some observers as predicting that the wave of chip shortages is expected to last another six months and could affect the profitability of car makers and other companies.
Renesas, the world’s largest supplier of automotive chips, recently asked customers to pay higher prices for power semiconductors and microcontrollers that control vehicle driving. The average price increase for these automotive chips is less than 10%, while the prices for server and industrial equipment chips have been raised by 10% to 20%. Toshiba has also begun negotiations with customers to raise the price of automotive power semiconductors and other products.
NXP, the world’s second-largest supplier of automotive chips, and Switzerland’s STMicroelectronics and other chip makers have also begun asking customers to pay 10 to 20 percent more for the purchase of chips, according to multiple sources. A NXP representative said Thursday (21) that the company has adjusted wafer prices, but details could not be disclosed. STMicroelectronics representatives declined to comment.
The chipmakers did not disclose which customers’ prices were raised, but Toyota’s Denso and Germany‘s Continental appear to be among them; Continental is a supplier to carmakers such as Fuchs. Chip makers have also raised the prices of chips sold to trading companies and other businesses.
In fact, demand for chips for smartphones and data centers has risen sharply as more people work from Home due to the new pneumonia outbreak.
Many chip makers have their own factories, but most of the industry has outsourced production to TSMC and other foundries. When demand for automotive chips began to surge late last year, foundries were nearing capacity limits, pushing up outsourcing costs. At the same Time, the price of Gold and other basic semiconductor materials has been rising, and is now being passed on to wafer prices.
The global shortage of wafers has already forced car manufacturers in Japan and other countries, such as Toyota, to cut production. Japanese carmaker Subaru will continue to reduce production next month. A source at Continental in Germany said it will take about six months for the situation to return to normal.
Renesas CEO Hidetoshi Shibata said Friday (22), “The semiconductor industry has outsourced specific processes to a very small number of foundries, and this is a very serious structural problem.” These remarks imply that the challenge to solve the current supply and demand problem in the short term is formidable.
Iku Kawasaki, president of Infineon’s Japanese subsidiary, also said that it would take time to increase production capacity. He said it would take two to three years to build a wafer factory.
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