Well what was going to be good news in general is only partly so because the semiconductor industry is so large and complex that generalization will only be used for evil and almost never to name something good. In principle, and according to reports from industry sources, the the price from some manufacturers of fries it is reducebut what about TSMC, Samsung and Intel?
Two years Already two cursed years where, without a doubt, everyone who wanted a product with electronics suffered the consequences of the pandemic and the shortage of semiconductors. Washing machines, a simple microwave, a car, a graphics card or a digital clock, everything has gone up in price and now, it seems, it’s finally over.
Chip prices are reduced, 2023 will be the turning point
The first to announce the good news was Texas Instruments and it seems that other players in the industry are following suit. The company is a world leader in a key sector that we have been unfamiliar with due to price and availability: analog integrated circuits. Key components for any of the Big Three chips, even for Apple, Qualcomm or Tesla.
Well, Texas has informed its customers that the imbalance between supply and demand is about to be corrected and will ease to a large extent by the second half of this year, with good expectations for 2023. But if it’s 6 months or more ahead, then where is the news itself?
Well, in the fact that the reduction is already real and Texas is lowering the market price for many of its chips, where, for example, some were sold for 100 yuan and are now offered by the same company for 20 yuan , a 80% dropwhich shows how inflated the market was for lack of stock.
The two factors behind the token drop
They are known in both cases and we have dealt with them previously. The first is a decline in market demand, caused by multiple factors, but the most important is the runaway inflation that we are experiencing. There are also improvements in the supply chain (except in China), where the price drop is quite significant and businesses are getting back to normal.
But that’s only part of the cake. To this must be added the increase in the production capacity of manufacturers. Texas, for example, has invested 30 billion in the creation of 4 FAB wafers which will arrive from the end of this year until 2025 or 2026, the time to build them while one of them is in the final phase. That said, does falling chip prices influence TSMC, Samsung or Intel?
The truth is that hardly. They will only benefit from lower shipping and container rental costs, but their chips continue to cost a fortune and wafers continue to rise. High performance chips in extreme lithographic processes are high cost and high value engineering parts, they are not affected by the rest of the market, because they have theirs and therefore they are less responsive to supply and demand, basically because everything is sold before it is even made.