Chip production: Wafer prices are increasing significantly

The prices for the wafers required in chip production are expected to rise by 20 to 25 percent in the coming years.

Chip manufacturers worldwide are confronted with fully booked contingents due to the ongoing shortage. In addition, the prices for the wafers that are absolutely necessary in production could now also rise significantly. A China Times report expects the price of 12-inch wafers to increase by 20 to 25 percent by 2025. This would see prices break the $200 mark for the first time.

Tight quotas

This prospect could ensure that the available contingents in chip production will be fully booked for a longer period of time. After all, the manufacturers want to secure the current price advantages. Since the supply contracts are usually agreed on a long-term basis, there is little left for manufacturers to be flexible. For example, AMD has to divide up the contingent of 7-nanometer chips booked with TSMC and thus distribute them among the chips of the Xbox Series X/S, the Playstation 5 and the Ryzen processors.

Price increase also for end customers

The new chip factories in Europe and North America, which Intel is building in Magdeburg, for example, could bring some relief. However, these plants will only be able to start series production in a few years. And here, too, the scarce wafers are needed. The Taiwan-based company Global Wafers is said to be fully booked by 2024, and the Japanese wafer manufacturer Sumco is said to have run out of capacity by 2026. According to Toms Hardware, rising wafer prices could mean a 2.5 percent increase in processor prices for end customers. However, the price of a chip is made up of many different components and processors. It is quite possible that the increase could also be significantly higher.

This is how CPU manufacturing works

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button