With semiconductor shortages intensifying around the world, Taiwan TSMC, the No. 1 global foundry (consignment production of semiconductors), is considering raising the price of semiconductors for vehicles by up to 15%. As major companies that produce semiconductors for vehicles are raising prices, it is predicted that a blow to global automakers will be inevitable.
According to the Nippon Geizai Shimbun on the 26th, Taiwanese semiconductor companies are considering a plan to gradually increase the price of semiconductors for vehicles from the end of February to March. Specifically, Vanguard International Semiconductor (VIS), a subsidiary of TSMC that manufactures automotive semiconductors, and UMC, the world’s fourth-largest foundry, are known to increase prices by up to 15%.
Last fall, it raised the price by 10-15% for additional or urgent orders only, and then raised the price again in a few months. UMC Chief Financial Officer (CFO) Liu Chi-tung told Nippon Geizai Newspaper, “I can’t answer the price,” and “it is true that semiconductor companies are in a relatively advantageous position in the balance of supply and demand.” Regarding when the semiconductor shortage phenomenon can be resolved, he replied, “It will take at least six months to build a production line.”
Automakers are known to negotiate delivery prices with auto parts suppliers every year. At this time, it is common for automakers to demand a 2-3% price cut in the name of cost reduction, but this time the situation has changed completely.
The Nippon Geizai Shimbun explained that this phenomenon “shows that the power to determine the price of semiconductors for vehicles has shifted from automobile manufacturers to semiconductor manufacturers.”
Previously, NXP in the Netherlands, the second largest company in the global automotive semiconductor market, and STMicroelectronics, the fourth largest in Switzerland, announced plans to increase the price of automotive semiconductors by 10-20% to automakers. Renesas of Japan, which has the third largest market share, is known to have requested an increase in product prices for customers. While these companies have set up a plan to raise product prices due to increased foundry production costs, TSMC has also discussed plans to increase prices, raising concerns that the price of semiconductors for vehicles will continue to rise in the future.
As such, automotive semiconductors in the global market are in short supply, and global automakers are experiencing the worst case of production suspension.
Ford has already recently closed its Louisville, Kentucky sports utility vehicle (SUV) plant, and decided to suspend operations at the Saarlouis plant in Germany until the 19th of next month. The Volkswagen Group also predicted that production in the first quarter of China, North America, and Europe would be disrupted by about 100,000 due to a shortage of semiconductors.
Domestic automakers have not yet suffered a shortage in the supply of semiconductors for vehicles, but are concerned about the prolonged disruption in semiconductor supply and demand. It is known that Hyundai Motor Company and Kia have secured automotive semiconductor inventory for 1 to 2 months. Although it is not at a level that is a problem for vehicle production right now, the situation is being watched closely in preparation for the prolonged shortage of semiconductors.
[이종혁 기자 / 신혜림 기자]
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