TSMC Chairman: No Sudden, Steep Price Hikes Despite Tight Market
TSMC Chairman C.C. Wei stated that while the company will reflect its technological and manufacturing value, it will not implement sudden, substantial price increases that would jeopardize customer survival. He clarified that TSMC's pricing strategy aims to capture fair value while maintaining sufficient gross margins to support long-term investment and continuous expansion, benefiting both TSMC and its clients. Wei expressed admiration for the high profitability of memory chip manufacturers, noting their impressive 86% gross margin, but indicated TSMC would be content with a 68% margin. He reiterated TSMC's core principle of being a trustworthy partner, emphasizing that the company will not drastically adjust prices due to market supply shortages. Instead, TSMC seeks reasonable compensation that allows for sustained customer growth and underpins the company's ongoing capacity expansion.
TSMC's stated pricing philosophy highlights a strategic balance between capturing value from its advanced manufacturing capabilities and maintaining long-term customer relationships. By committing to avoid drastic price hikes, TSMC signals a focus on predictable cost structures for its clients, which is crucial for their own product planning and market competitiveness. This approach suggests an understanding that sustainable growth for its foundry business is intrinsically linked to the success and expansion capabilities of its diverse customer base. The company's emphasis on reinvesting profits into capacity expansion indicates a forward-looking strategy, anticipating continued demand and aiming to solidify its market leadership through technological advancement and scale, rather than short-term profit maximization through price gouging during periods of high demand.
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