Earlier this year, TSMC signaled a price increase for chip production outside of Taiwan. The company is facing higher costs due to inflation and increased electricity rates. TSMC is also diversifying its production with new facilities in Arizona, Japan, and Germany. Despite these moves, Wei stated that it would be impossible to move all production out of Taiwan. Analysts estimate that Nvidia will account for 10% of TSMC's 2024 revenue.
Key takeaways:
- TSMC's CEO, CC Wei, has hinted at a potential price hike for their products, sparking speculation in the market. This comes after he commented on the high price of Nvidia's products, a company for which TSMC is a key supplier.
- Nvidia's CEO, Jensen Huang, appears to be supportive of a potential price increase from TSMC, stating that it is consistent with the value they deliver.
- TSMC has already indicated earlier this year that it plans to charge customers more if they want their chips made outside Taiwan, due to the higher costs associated with production in other areas.
- There are geopolitical concerns surrounding chip production, as the majority of the world's chip production is concentrated in Taiwan, which China claims as its own territory. TSMC is diversifying its production with new facilities in Arizona, Japan, and Germany.