Sunday, June 26, 2022
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TSMC expects consumers to pay sooner and is rumored to be planning another price hike

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According to allegations in Taiwanese media, the Taiwan Semiconductor Manufacturing Company (TSMC) is pressing its clients to minimize payment timelines. The adjustment comes as the fab expands its chip manufacturing operations in Taiwan and around the world.

TSMC is presently shifting gears to mass produce semiconductors using the advanced 3-nanometer (nm) manufacturing process, while also establishing a new facility in the United States and moving toward next-generation plants for technologies like 2nm.

Reduction in Payment Timeline

According to industry sources, TSMC has shortened its payment timeframe to reflect a $40 billion capital investment. According to the United Daily News (UDN), TSMC is requesting that its clients reduce their payment timelines.

TSMC expects consumers to pay sooner and is rumored to be planning another price hike
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Customers typically have agreements with companies in which they receive their items and have a certain amount of time to pay the supplier. This duration is determined by several criteria, including the customer’s financial strength, connection with the supplier, and size.

According to UDN, certain companies’ payment timelines have been cut in half, from 30 days to 15 days. Others have had collection times ranging from 45 days to a month. The modifications are based on the order sizes placed with TSMC, according to UDN, which cites the Taiwanese IC design business as its source.

About the TSMC’s Investments

These sources also claim that TSMC’s high capital investment is a factor in the shorter collection days. In order to compete with its rivals in the semiconductor manufacturing space, the company is establishing facilities in the United States, Japan, and Taiwan. Its market share has risen in comparison to other chipmakers over time, necessitating the expansion of manufacturing capacity.

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Furthermore, the industry estimates that TSMC has notified its customers of yet another OEM price change for the coming year. These reports come at a time when the company’s prospects have been boosted by a falling Taiwan currency and a 30 percent management growth prediction for 2022.

In other Taiwanese news, Ms. Weng Mei-hua, the region’s economy minister, informed listeners in a broadcast earlier today that TSMC has nothing to fear from power disruptions.

Ms. Mei-hua was asked about TSMC Chairman Dr. Mark Liu’s recent statements in which the CEO expressed concern about current power-generating challenges in Taiwan and their influence on his company.

Response Regarding the Power Cuts

In reply, the minister reassured the audience that the research parks where TSMC operates have some of the strongest protection against power outages and that the company also has its power systems that automatically come up in the event of a power outage.

TSMC expects consumers to pay sooner and is rumored to be planning another price hike
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She also expressed confidence in Taiwan’s ability to meet higher electricity demand during the summer months, citing rain in the first half of 2022 as a reason for reservoirs having sufficient water levels for electricity generation.

Recent power cuts in the region, according to Ms. Mei-hua, have been caused by a range of factors including wildlife, building errors, thunderstorms, and other natural calamities.

She said that the technology parks are connected to a high-power grid, with each factory receiving power from its substation. Chip production is a delicate operation that can cost millions of dollars if the power supply is disturbed even for a short amount of time.

Read: Lenovo Smart Clock Essential with Alexa launched for ₹4,999

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