TSMC just won't drop its prices

Taiwan Semiconductor Manufacturing Company (TSMC) won’t be lowering prices any time soon. Instead it will capitalise on its leading position and will dictate how the market operates.

There were reports in Taiwan’s Economic Daily suggesting the company has been in talks with clients to lower prices by three to five percent in the third quarter.

But it doesn’t make sense, according to industry analyst at Future Horizons Malcolm Penn. The company, really, has a monopoly on the industry – and given the time of the year and the health of the markets, TSMC will do no such thing. 

“Now is a good time for the industry, demand is high and the Japanese earthquake has affected supply, meaning prices should be going up, something TSMC knows,” Penn told TechEye.

He pointed out that TSMC has such a huge grasp on the market that “if it was to reduce or up prices the industry would be affected.”

“There would be no reason for the company to reduce their prices,” said Penn.

He reckons clients wouldn’t buy from the company “without first agreeing a fixed price, as they don’t want any surprises when they get their supply.”

“The fact is that TSMC is a major player in the market, it sets the bar for the industry with the exception of Apple,” he said.

“Take out the big ones and the world is TSMC’s. It says jump, we say, how high?”