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Infineon confirmed the price increase: the price is too low will make manufacturers lack the motivat

Infineon confirmed the price increase!


 

Recently, Reinhard Ploss, CEO of Infineon, a well-known chip manufacturer, said that due to rising production costs, the price of chips will have to be increased. He also emphasized that too low transaction prices will reduce the willingness of manufacturers to expand production...


Infineon confirmed the price increase: the price is too low will make manufacturers lack the motivation to expand



According to Nasdaq quoting Reuters, on Friday (20th) local time, German chip manufacturer Infineon CEO Reinhard Ploss said in an exclusive interview with the German Business Week podcast, "We will increase (chip) prices, or say The price of (chips) has been increased."





"Our own production costs have also increased significantly because we do not produce all the chips ourselves. So we have to pass on these costs," Ploss said. Infineon chips are not 100% self-made, so the significant increase in production costs during this period is also Need to be passed on to customers.


Ploss further pointed out that the previous downturn in semiconductor prices is also one of the reasons for the current chip crisis. He believes that "if the transaction price of the chip is very low, then the momentum for (manufacturers) to expand production is very low."


It is well known in the industry that automotive chips are demanding, and most of them are still produced using mature processes (8 inches). According to statistics, an 8-inch wafer fab alone will cost 1 billion U.S. dollars, and a 12-inch fab will invest as much as 3 billion U.S. dollars.


For manufacturers, it is understandable to expand the advanced process, but it is not in the interests of the manufacturers to expand the mature process. In addition to paying high investment costs, the latter also needs to worry about the rapid changes in market demand: if the capacity of the mature process is expanded, the market demand will be short. Reversal within time, resulting in idle new capacity more than the gains.


For manufacturers, it is understandable to expand the advanced process, but it is not in the interests of the manufacturers to expand the mature process. In addition to paying high investment costs, the latter also needs to worry about the rapid changes in market demand: if the capacity of the mature process is expanded, the market demand will be short. Reversal within time, resulting in idle new capacity more than the gains.



Infineon CEO: The shortage of automotive chips will continue until 2022



The German chip manufacturer said earlier this month that the latest wave of COVID-19 has disrupted production in Asia and has reduced its chip inventory to historical lows.


Reinhard Ploss said: "The rebound of the global automotive market continues to be hindered by severe supply constraints throughout the value chain, and it will take (some) time to restore the balance between supply and demand. In our view, this will continue until 2022."


The German Institute for Economic Research (IFO) pointed out that the German automotive industry and its suppliers are facing the worst chip supply shortage in 30 years. The agency's survey results show that about 83% of companies have been affected by this global chip supply shortage crisis, up from 65% in April.


IFO researcher Oliver Falck said: "This will lead to production stagnation." "The semiconductor shortage will continue for some time."


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