TSMC may raise prices for high-end chips

By Baker Li

HSINCHU, Taiwan (Reuters) - Top contract chip maker Taiwan Semiconductor Manufacturing Co Ltd (TSMC) said on Tuesday it may raise prices for its higher-end chips as rising costs threaten to squeeze profits.

Semiconductor makers face higher costs to build state-of-the-art chip plants for most cutting-edge chips, and are also feeling the pain of rising inflation.

As the industry's leading and oldest player, with more than three times the sales of closest rival, United Microelectronics Corp (UMC), TSMC has stressed in recent years that its products should command a premium over its peers.

"Average selling prices have been falling and profits have been under pressure, and we have to work together to create value," Jason Chen, a company vice president in charge of global sales and marketing, told a TSMC technology symposium.

He said price changes would be mostly for chips made by advanced process technology, but would not say how big they would be or when they would occur.

He did not say when TSMC last raised prices.

"We face some structural profit pressure. In the short term, we also face pressure from inflation and oil prices," Chen said.

Consumer prices in Taiwan, where TSMC is based, rose 3.86 percent in April, with core inflation up 3.1 percent -- a nine year high.