Industries Supply

According to sources close to Nikkei Asia, Taiwanese chip maker Taiwan Semiconductor Manufacturing Co. (TSMC) has informed its customers that it may raise product prices for the second time in less than a year.

The reasons cited were rising inflation and costs, as well as the company's massive expansion plans to help alleviate the global chip shortage.

TSMC, currently the world's largest contract chipmaker, is expected to raise prices by "single-digit percentages" for both conventional and high-end chip products, six sources said. Nikkei Asia said. The price increase will take effect from the beginning of 2023.

Two of the sources said that the price increase could be around 5-8% depending on the manufacturing technology, from high-end chips to chips with "mature node" (less advanced) technology. ), from connector chips and sensors, to microcontrollers and power supply ICs.

"The early announcement is to help customers prepare for the price adjustment. As for TSMC, the price increase is to address rising costs and have the necessary funds to implement the historic expansion plan. company," a source said.

According to another source, in the context of declining demand for products such as smartphones and personal computers, it is difficult for TSMC customers to fully accept this upward price adjustment.

"With high-end chips it is still possible, but with less advanced chips, it is very difficult for customers to accept," this person said.

Rising production costs are putting great pressure on chipmakers, as demand for smartphones and personal computers slumps due to market uncertainties caused by inflation. outbreak, the war in Ukraine and the blockades against the Covid epidemic in China.

The price increase also reflects TMSC's huge expenses for its expansion investment plan. The company plans to invest 100 billion USD between now and 2023 to increase capacity, of which this year alone is 40-44 billion USD.

TSMC's announcement comes less than a year after the company's biggest price hike in a decade. Last August, the Taiwanese chip maker said it would raise prices by up to 20% amid an unprecedented global chip shortage crisis and the company is implementing a historic capacity increase plan.

Some of TSMC's smaller competitors, such as United Microelectronics and Semiconductor Manufacturing International Co. also raised prices several times in the last year. Some carriers even raised prices more strongly than TSMC. However, TSMC's rare move last year rocked the chip industry.

Equally surprising was TSMC's decision to stop offering quarterly discounts to chip design customers once their products have entered mass production with a smooth process.

"All chipmakers are affected by rising component and raw material prices, and this increases production costs," TSMC Chairman Mark Liu said in March.

TSMC's move also comes at a time when the chip manufacturing equipment industry is grappling with serious shortages from components to raw materials. This situation causes equipment delivery times to take up to 18 months for some customers like TSMC and threatens to thwart chipmakers' plans to increase capacity.

ASML, Europe's largest chip equipment maker, recently expressed concern about rising inflation, rising labor, materials and energy costs, and the costs incurred to import components. The company forecasts all of those factors will drive its gross margin down 1 percentage point this year.

CNN Business page, citing data from AAA, said the national average retail price of gasoline in the US increased by 4 cents on May 10, to $4.37 per gallon, equivalent to nearly 26,700 VND per liter. This price broke the old record of $4.33/gallon set on March 11.

Over the past week, gasoline prices in the US have increased by 17 cents, increasing inflationary pressure - an issue that economists fear could push the world's largest economy into recession. This is also a concern that has caused waves in the Wall Street financial market recently and made Americans become pessimistic.

In April, the national average gasoline price in the US sometimes fell to $4.07/gallon, when the US government announced a record large release of strategic oil reserves and the price of crude oil "cooled down". However, at the time, analysts had forecast that this was only a temporary relief.

Since the outbreak of the Russo-Ukrainian war, which sent global energy prices soaring, retail gasoline prices in the US have increased by 25%.

According to the US Energy Information Administration (EIA), the actual retail gasoline price in this country must exceed 5.3 USD/gallon, then after deducting inflation, it can break the old record set in 2018. 2008.

However, current gasoline prices are enough to exacerbate inflation in the US. In March, the US consumer price index (CPI) increased by 8.5% year-on-year, the strongest increase in more than 40 years. The April inflation report will be released by the US Department of Labor on May 11, and according to the forecast, the CPI increase will decrease slightly compared to March but will still be higher than 8%.

According to some experts, gasoline prices in the US may even go higher. Andy Lipow, president of Lipow Oil Associates, believes that the retail price of gasoline in this country will skyrocket to 4.5 USD/gallon within the next 10 days.

However, the retail price of gasoline has a certain lag compared to the price of oil. And the good news is that in the session on May 10, the price of WTI oil futures in the US did not hold the milestone of USD 100/barrel.

Russia's economy is heavily dependent on commodity exports, with revenues from the sale of crude oil, petroleum products and natural gas, accounting for about half of Russia's federal budget. The main exports of Russia are: fuels and energy products (63% of total exports, of which crude oil and natural gas account for 26% and 12% respectively); metal (10 percent); machinery and equipment (7.4%); chemical products (7.4%) and food and agricultural products (5%). Main export partners are: China (12%), Germany (9%), Netherlands (8.4%), Italy (5.8%), Belarus (4.7%), Turkey ( 4.4%) and Japan (4.1%).

The Covid-19 pandemic has caused competitive pressure from Chinese steel to decrease significantly, even exports to this market have increased dramatically because the country's domestic consumption demand has increased sharply, while the supply has not can increase immediately to respond.

Especially, for the first time, after many years, global steel demand is no longer dependent on China. Moreover, in the context of Western countries promoting investment in infrastructure, the demand for steel has increased, so Vietnamese steel enterprises have tried to take advantage of opportunities from export channels.

China gradually reduces export output, causing shortages for partners that regularly import steel from the country. This opens up opportunities for the surrounding countries

At the same time, world steel demand has increased significantly since the first quarter of 2021 when a series of countries approved and accelerated the construction of infrastructure projects. This trend will continue at least until the first half of 2022.

Which country is emerging to replace China to be the best place to buy products made from steel manufacturing?

1, Electricity price

Steel production depends significantly on electricity bill to reach effectively. There are a few “developing countries” in Asia to consider: