The electronics industry gasps under the crossfire of the long-term effects triggered by the pandemic and the repercussions on the supply of the war in Ukraine, the Japanese one must also face the devaluation of the yen against the dollar. Among the realities of the Rising Sun there is one, called Showa Denkowho told a Bloomberg his moment of great difficulty caused by external factors.
Management was forced to make drastic choices: terminate on the one hand i less profitable contractson the other raise prices to customers. The point is that among them is TSMCwhich in turn has in Apple a major customer: Taiwanese foundries’ 2021 production is said to have been absorbed by Cupertino for more than 25%. In September of last year, TSMC increased the cost of chips by 20% except for those commissioned by the best customer, Apple, which saw invoice costs increase by just 3%.
However Hideki Somemiya, Showa Denko’s chief financial officer, envisions one scenario of great difficulty immediately and at least until 2023which forced a “drastic increase in costs passed on to customers”in several cases close to the doubling.
A crucial theme this year, shared by all the players in the materials industry, is the scale of the costs that we will be able to convince customers to share with us – said Somemiya. – The current state of the market requires us to ask for double the amount we had previously calculated.
This means that Showa Denko and the customers they will have to choose how to handle the tax, whether to transfer it entirely to the customer or absorb part of it by cutting profit margins. The Japanese company, Bloomberg points out, is not the only one being forced to raise prices right now: dozens of companies have already anticipated the price increasesand among these there would be, reports the newspaper, the two main chip manufacturers, TSMC and Samsung.
All that remains is to wait for the moves by major players, those who, like Samsung and Apple, have a position to influence the market trend. We are just a few steps away from the crucial junctions for 2022 of technology: next month Samsung will announce Galaxy Z Fold 4 and Z Flip 4, then it will be the time of Apple and the iPhone 14. In two stages there is the short-term future of the market: Will the price increases end up in the pockets of consumers?
