Apple is also uncomfortable with TSMC’s price hike, calling card IP factory dividends ebb | Anue Juheng

TSMC (2330-TW)(TSM-US) was originally scheduled to raise the price again next year, but recently it was reported in the market that the major customer Apple (AAPL-US) has taken the lead in rejecting TSMC’s price increase, symbolizing that even the world’s largest companies are also feeling the cold wind of the boom. Dividends will also be lost.

Taiwanese IP companies include Liwang (3529-TW(、M31)6643-TW) are the main suppliers of TSMC IP, and TSMC is an important customer of the two companies. In particular, the IP royalty income is calculated based on the percentage of the selling price of each wafer (per wafer). The growth of IP manufacturers’ royalties is likely to converge.

Looking back on the past two years, Liwang has benefited from UMC (2303-TW)(UMC-US) The significant increase in foundry costs and TSMC’s increase in quotations, as well as the increase in the contribution of advanced process IP, the royalties charged per wafer have risen sharply, driving the annual revenue growth of last year and the first eight months of this year to jump at least 30% .

In mid-May this year, TSMC even announced that it intends to raise the foundry price again next year by 6%. At that time, the market was optimistic. Liwang and M31 are the main IP suppliers of TSMC, and the two companies are expected to follow suit. Customers benefit from higher prices.

In particular, the wafer cost of TSMC’s advanced process is often 10,000 to 20,000 US dollars. Even if the percentage charged is still the same, the higher the selling price and the faster the absolute amount of growth, the advanced process will naturally become the main growth driver of the IP industry. Taking the lead in stating that it does not accept TSMC’s price increase, the royalties that each IP factory can receive will also be affected.

In addition, ASIC operators such as creative (3443-TW), World Core-KY (3661-TW), etc., in addition to placing orders with fabs on behalf of customers, it also owns IP that can be used to serve customers. When the price of wafers stops rising, it may also be disrupted at the same time.


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