Semiconductor analyst: TSMC only increases the price of Apple by 3%. How can other customers stand it?

With regard to the rumors that TSMC raised the contract price by 20%, but only 3% for big customer Apple, Lu Xingzhi, a well-known semiconductor analyst, said that if TSMC did so, how could other customers such as MediaTek, Nvidia and AMD stand? There are three other key points that need to be observed.

According to Taiwanese media reports, Lu Xingzhi posted on Facebook that Apple orders account for more than 20% of TSMC's revenue, but its profit accounts for less than 20% and its gross profit margin remains below average. Why TSMC gives such customers special offers is worth pondering.

In contrast, other important customers such as AMD, Nvidia and MediaTek, as well as other mature process customers whose order gross margins are above average, are told to raise prices by up to 20%. Why?

In addition, the article specifically points out that three key points remain to be observed:

First, TSMC's offer to Apple should be based on the fact that without Apple's single test, it is difficult to say whether TSMC's advanced manufacturing process can always lead the world. Although Apple currently has better bargaining power than TSMC, TSMC is expected to slowly withdraw its preferential policies once it ceases to be the top customer of TSMC's advanced processes.

Second, according to industry feedback, TSMC large customers generally increase prices by 10% and 20%, while small customers are still communicating. It is believed that the 10% price increase of 20% is an official statement that major customers cooperate with TSMC. In fact, it depends on the number of orders, and the specific results will not be announced until next year.

Third, TSMC should consider whether it is reasonable to put capital expenditure and R & D expenses on the advanced processes with fewer customers, strong customer negotiation ability, high depreciation costs and the worst gross profit margin as a contract manufacturing leader, and whether the demand for process nodes in the semiconductor industry in the next 20 years will be concentrated on advanced processes or blossom everywhere as in the past 20 years. I believe that TSMC management has the answer and knows how to deal with it in the future.