The second largest chipmaker in Europe, STM (STMicroelectronics) has announced that it would be raising the prices of its products across the line starting from 1st June 2021. This announcement was shared earlier this week, as the firm claims that it is facing issues with the procurement of materials.

Reportedly, the price hike arrives as the cost of materials has also risen along with the surge in demand amid the growing global shortage of semiconductors. STM added that “Semiconductor demand is currently reaching unprecedented heights, leading to major challenges in meeting orders despite our significant capital investment.” The chipmaking giant also shared a statement that was cosigned by Collins Wu, the regional vice president for the Asia Pacific region.

For those unaware, the firm is based in Switzerland and specializes in making power discrete devices and microcontrollers units (MCU) for automotive applications. But now, the company is struggling to secure materials suppliers, as the suppliers themselves are struggling to meet customer demand due to the semiconductor shortage. This has led to “cost increases and more aggressive commercial terms to maintain our supply of these scarce materials.”

Furthermore, the hike in price is supposedly not a short term surge as it is expected to be sustained for at least another year or two. This situation is also further worsened by the already stretched 6 to 12 month long lead times that are required for capacity expansion at foundries like TSMC, the world’s largest contract chipmaker.

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Ever since the US government added Huawei to the ‘Entity List’, the firm has been struggling hard to carry out its businesses worldwide. To minimize stress, the company has been partnering up with multiple non-US based corporations. The latest organization to join hands with the Chinese tech giant is STMicroelectronics with which it has struck a deal to design and manufacture chips for automotive and mobile devices.

According to a report by Nikkei Asian Review, Huawei’s partnership with the Geneva-headquartered STMicroelectronics in developing chips is said to have begun as early as last year but it has been only made public now. Since Huawei cannot work with US-based firms as well as companies using technologies originating from the US, it has been selectively looking partners.

Since the US government is expected to broaden trade restrictions for Huawei by including TSMC (Taiwan Semiconductor Manufacturing Company) as it uses US-based technologies, the Chinese telecom giant is thought to have inked a deal with STMicro as a backup. For the unaware, TSMC plays a key role in manufacturing Huawei’s HiSilicon range of chips that power the company’s smartphones and network equipment.

Additionally, Huawei has collaborated with STMicroelectronics as it is known for automotive sensor chips such as gyroscopes, accelerometers, motion, optical and image sensors. The Chinese tech giant has a keen interest in the smart automotive industry for years. Partnering with STMicro can help it get close to companies like Tesla and BMW, who are customers of the French-Italian chip manufacturer.

Although the end-goal of Huawei’s partnership with STMicroelectronics is to build chips for smart automotive solutions, the companies will initially design and manufacture chips for Honor as well as Huawei branded smartphones.

UP NEXT: Huawei will be venturing into Smart Car Charging Solutions with its new HiCharger DC Fast Charging Module

(Source)

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