Apple and Samsung have a headache because of a small company in Japan
According to Bloomberg, raw materials in the semiconductor chip line are suddenly increasing, causing the cost of components for iPhone or other smartphones to increase, which is causing big headaches to find ways to solve.
On July 5, Japanese chemical supplier Showa Denko KK said it would increase the price of materials used to make semiconductor chips, and cut back on unprofitable products. The decision comes at a time of challenges for the $550 billion semiconductor industry.
Showa Denko KK’s Chief Financial Officer shared that the increase in raw material prices is a must because there has been too much pressure from the negative impact of Covid-19 to the increase in oil prices due to the conflict in Russia and the near future. This is the devaluation of the yen.
“A common big problem this year for businesses in the material supply industry is how to convince customers to share the cost burden. Market developments forced us to double prices. compared to the previous expectation”, the company representative said
Showa’s side also showed that they have stopped producing unprofitable items, as well as non-potential contracts. In the most recent year, their share price has fallen by a quarter. The company will use the remaining time of this year to streamline and streamline the field of operations.
Looking at the current market, not only Showa Denko raised prices, other component manufacturers and material suppliers also made similar moves to cope with the current difficulties. TSMC and Samsung Electronics have informed customers about the possibility of component price increases in the near future.
Tokyo-based Showa Denko KK, specializes in supplying chip fabrication materials to TSMC Corporation, the world’s largest semiconductor chip maker, a key partner of Apple, Samsung and other major technology companies. In addition, they are also an important supplier of Toyota.
