A global chip shortage is pushing up the price of semiconductors. TSMC raised its pricing by 3% in the first quarter, due to over-demand. Other Taiwan foundries have hiked the price of 8-inch wafers by at least 20% since 2020. With costs soaring for chips used in cars, phones, and laptops, consumers are expected to feel the pinch. Amid a pandemic-fueled shortage of semiconductors, chipmakers have been raising their prices. Sources say that Taiwanese foundries UMC, Vanguard International and PSMC have raised the price of 8-inch wafers by at least 20% since last year. TSMC raised prices by 3% in the first quarter of 2021. And the shortage is projected to get more severe. This month, IC giant MediaTek raised prices by 5% for select products, due to the soaring cost of supplies that’s raising the cost of doing business.Arisa LiuTIER researcherFrom TSMC’s previous announcement, we know that the company will be suspending its discount deals with clients until the end of next year. Its delivery times are now more than 30 weeks. These days the car industry still finds itself having to scale back production. There’s starting to be a shortage of smartphone chips, too.The chip shortage is expected to intensify in the second quarter, hitting assembly lines for cars, smartphones, and laptops. In response, foundries worldwide are pushing to expand production.Taiwan chipmaker PSMC is investing NT$278 billion to build two new 12-inch wafer fabs in Miaoli’s Tongluo Township. Last month, Intel announced it will spend US$20 billion to build an advanced foundry in the U.S. with a new independent chip designer and a monthly output of 30,000 wafers. TSMC has a US$6 billion plan to build six plants in the U.S. state of Arizona, with a projected monthly capacity of over 100,000 wafers. Meanwhile, reports say Samsung’s new plants will use advanced processes at the 5-nanometer level and below to produce up to 70,000 wafers a month. These breakneck developments have raised concerns over what happens if the chip market crashes, as it did in 1980.Arisa LiuTIER researcherCurrently operations are at full capacity and chips are in high demand. That’s going to be the situation with advanced processes until the end of next year. For more mature processes, the demand will persist until the end of this year. The shortage will not begin to ease until the beginning of next year.With chips set to stay scarce, prices will only climb higher. That spells bad news for downstream producers and for consumers as well.