Recently, a fire on a 12-inch chip production line in Renesas Electronics has further added to the shortage of automotive chips. Industry insiders pointed out that it will become a new normal for chip suppliers to provide higher prices to win more capacity support from wafer foundries.

digitimes reported that industry sources revealed that this year TSMC’s mature process capacity for 8-inch and 12-inch wafer fabs has been booked out, even compressing the production of ordinary consumer chips. "Automotive chip and other chip suppliers will have no choice but to voluntarily increase their offer prices and strive for more production capacity in 2022." Industry insiders added.

In addition to automotive chips, almost all other types of IC products are increasingly in short supply, including power management ICs, display driver ICs, network chips, HPC chips, 5G and AI chips. According to industry insiders, these chips are currently at the lowest inventory level and are expected to maintain a strong demand momentum in the next few years. At least in the first half of 2022, the overall semiconductor production capacity will maintain a high utilization rate.

The report pointed out that, in fact, chip manufacturers and system manufacturers have conducted in-depth negotiations with TSMC on capacity allocation in 2022 or even 2023. Industry insiders said: "Except for heavyweight customers like Apple, they will face a floating pricing system implemented by pure OEM companies, and OEM costs will continue to spiral upward."

In addition, the above-mentioned people said that in order to obtain the production capacity of TSMC, UMC, VIS, and Power Semiconductor Manufacturing Co., Ltd., chip suppliers must provide their 8-inch and 12-inch wafer manufacturing services at prices higher than those set by foundry in the future.