Because of the global crises and sales problems, TSMC customers want to pay less and, above all, do not want to participate in future price increases from the foundry. But TSMC does not give in and shows that the group has much more leverage. Eight out of ten customers cannot switch quickly to another location.
This point reveals the problem of an almost classic monopoly. Prices are dictated, customers have to accept them because there is no alternative. On paper, there is an alternative with Samsung, but in reality many major customers have recently been taught better: It doesn't work without TSMC.
The stumbling block has been the price increases at TSMC that have been rumored for a few weeks. Prices are to be increased by around six percent in the coming year, but as usual, they will never be equally pronounced in all areas and stages of production. Shortly thereafter, the rumor circulated that Apple, as TSMC's largest customer, did not want to follow these increases. Nvidia would also consider such a decision. Immediately afterwards, rumors circulated that TSMC might put the price hikes on hold, which sounds a bit different again with today's media report from Digitimes.
Accordingly, TSMC will make no or almost no exceptions in terms of price increases in the coming year. Customers are accommodated in order to adjust or push back delivery quantities, but TSMC will not shoulder the high prices for raw materials, research and investment in future products as well as technologies and factories alone. TSMC only revised the previous payment strategy in the summer.
In the end, there are likely to be many individual decisions. Small companies with sales problems are quickly on the brink of financial collapse, some of the warehouses are already overcrowded and sales are low. In such a situation, continuing to pay high or soon even higher prices for new products that go directly to the warehouse could put these companies in trouble. The possibility of shifting or reducing the quantity of delivered wafers or chips should often have an effect there, but even that is only possible to a small extent.