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Semiconductor shortage to cause rise in prices in 2021

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The prices of semiconductors are expected to rise due to shortages in production capacity in comparison to their demand. This has already caused certain companies to inform their customers about the increase in prices.

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According to TheElec report, the world’s largest contract chip maker, TSMC, recently reversed its price cut policy for its major customers, due to the higher demands. Furthermore, this is also reflected in the actions of other foundry based firms like GlobalFounderies, which reportedly is operating all of its fabs at near 100 percent capacity. The South Korean tech giant, Samsung Electronics, is apparently also in a similar position at the moment.

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Other chipmakers in Taiwan, including UMC and VIS, have also increased chip production prices, and in the case of DB HiTek from South Korea, prices have hiked as high as 20 percent despite their fabs running at 100 percent capacity. Thus, the shortages of supply in the market are expected to cause a rise in memory and semiconductor systems prices.

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SemiconductorSimilarly, the fixed prices of DRAMs are also expected to rise by around 5 percent in the first quarter of 2021. These chips spot prices were around 3.46 US Dollars back in December 2020, marking a rise of 30 percent from November 2020. This price hike also being witnessed by Chinese companies like Goodix, and LCD components makers like Novatek.

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