Price drops by 80%, Chip Giant warned: the party for semiconductor is over

In China market, some analog ICs made by Texas Instruments have seen a big price drop since March 2022. This signaled a reverse of the trending that has been going on since 2020. In the past two years, the global semiconductor industry has suddenly experienced a supply crisis, which has directly led to the shortage of various chips and resulted in the price increase. The price of some chips has risen by dozens or even hundreds of times, especially for analog chips, which once reduced the production of the global automobile industry. Texas Instruments took the lead to warn that the era of global chip price hikes is about coming to an end.


According to reports, the global analog IC leader Texas Instruments (TI) informed customers that the imbalance between supply and demand in the second half of the year will ease, which may make the analog IC price increase led by power management chips (PMIC) to an end. This may even impose a potential price pressure to the whole semiconductor manufacturing sector.

It’s hard to image how big this price slum will be by many of us who have seen the semiconductor party lasted for the past two years. According to media reports, the market price of some Texas Instruments analog chips has dropped up to 80% since March 2022.

This wave of chip price cuts is the result of a play by multiple factors, such as the decline in market demand, the increase in the production capacity of manufacturers. The decline in demand is most due to the COVID-19 lockdown in some areas where factories were closed temporarily. The increase of production capacity is the result of chip shortage that drove the increase of manufacturing facilities upon the start of chip shortage two years ago, which match the cycle of semiconductor facilities from construction to production. Texas Instruments has invested US$30 billion in 4 wafer factories. In the second half of this year, one factory will start mass production, and another factory will be added at the beginning of next year. The crisis of chip shortage due to tight production capacity is gradually eased.The market expects that the price of analog chips will decline in the second half of this year, but wafer foundries such as TSMC now generate half of their revenue from advanced processes of 7nm and below, which can last for a while and are expected to be affected in 2023.

The entrance of the Texas Instruments plant in Richardson (by Juan Figueroa of

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