TSMC’s electricity expenses increased by 25%: Taiwan will adjust electricity prices from April, affecting the gross profit margin of the semiconductor industry

According to news from this site on March 25, Taiwan’s “Economic Affairs Department” decided to increase the overall electricity price in Taiwan on the 22nd of this month.

Targeting large electricity consumers with annual electricity consumption exceeding 500 million kWh, electricity prices will increase by 15%~25%. Many affected semiconductor companies have stated that their gross profit margins will be under pressure. .

This site summarizes some company feedback as follows:

• Nanya: For DRAM memory companies, rising electricity prices will increase costs by 1% to 3%, which will also affect gross profit margins;

• Power Semiconductor: For wafer foundries, electricity expenses will increase by about 15%, and operating costs will rise by about 1.5%;

• World advanced: Wafer foundry Wafer foundries are expected to apply a 15% increase, affecting approximately 0.5%~1% gross profit margin; Impact on profit margins;

• Global Wafer: an upstream silicon wafer manufacturer, gross profit margin is expected to be flat or slightly lower than last year.

• Taiwanese media "Business Times" estimates that TSMC, the leader in the foundry industry, will consume more than 30 billion kilowatt hours of electricity this year and will become the only semiconductor company to adapt to the 25% increase in electricity prices

  . According to calculations, the impact of this electricity fee adjustment on TSMC’s gross profit margin is approximately 0.14%.

TSMC stated that it respects the relevant electricity price adjustment decisions and its long-term gross profit margin target remains unchanged at more than 53%. For reference, TSMC's gross margin was exactly 53% in the fourth quarter of last year.

In addition, TSMC also said that it will achieve a cumulative energy saving of 13% in 2022, and the annual power saving will increase by 700 million kWh. TSMC is gradually increasing its renewable energy consumption, which currently exceeds 12%, and its overseas subsidiaries aim to achieve full renewable energy operations.

For TSMC, compared with rising electricity prices,

insufficient power is a bigger concern

:

TSMC’s electricity consumption in 2022 has reached the level of the entire Taiwan region 7.54%, and may exceed the 10% mark in the future. Due to the characteristics of semiconductor production, TSMC will suffer billions of NT dollars in losses in the event of a power outage.

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