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According to South Korean media “BusinessKorea”, previous national media said foundry leader TSMC canceled the price discount for major customers for the first time, amounting to news of a disguised increase in foundry prices . The report noted that TSMC’s move gave clients an opportunity. Order from competitor Samsung, which makes Samsung profitable. In this regard, domestic market participants noted that large customers are unlikely to transfer orders due to price when Samsung’s technology is still unable to catch up with TSMC.
South Korean media reported that TSMC is currently the world’s number one foundry. However, according to previous national media reports, TSMC has canceled its casting price discounts for major customers for the first time in 10 years, amounting to a disguised price increase. This move will make Samsung’s foundry business more attractive to customers.
The report further noted that TSMC has canceled the 3% discount on the 12-inch cast price for its main clients. And TSMC’s decision will have a negative impact on the profitability of major customers like Apple and AMD. As for the reason for the cancellation of the discount by TSMC, it is to guarantee the funds necessary to increase the production of 5nm products by 20% by the first half of 2021. Also, some market analysts said that the reason why TSMC cancels the discount is to increase its profit. Because, TSMC’s operating profit in the first three quarters of 2020 reached US $ 5.11 billion, a significant 39% increase over the same period in 2019.
The report emphasized that because TSMC canceled discounts for major customers, many global IC design companies began inquiring about the status of Samsung’s orders. According to the market and technical consulting unit Moor Insights & Strategy, in the global foundry market, in addition to TSMC, another high-tech foundry is needed. But in this regard, relevant domestic market participants said that TSMC has further canceled its discounts to major customers due to the current low production capacity. If this situation is true, it means that TSMC is confident in itself and in its customers’ orders, reducing the likelihood that the high-profit advanced process foundry will transfer orders.
(First Image Source: TSMC Official Website)
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