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Realtek set to hike quotes for Wi-Fi SoCs, Ethernet chips in 1Q22

Taiwan's major networking IC supplier Realtek Semiconductor is set to raise its quotes for Wi-Fi SoCs and Ethernet chips in the first quarter of 2022 to reflect increased foundry costs, according to industry sources.

The sources said networking chips for consumer applications are expected to reach a market equilibrium in 2022, but those for infrastructure, automotive electronics, commercial and industrial applications are on track to ramp up steadily in the year, driving suppliers to hike their prices.

But price hikes for networking chips are expected to average at only 5% to cover part of around 10% foundry cost increase, as clients are increasingly reluctant to accept further price rises after chip vendors repeatedly increased their quotes in 2021 at a larger pace than cost increases for upstream materials, the sources continued.

Networking ICs are mostly fabricated using mature process nodes of 28-40nm, with some migrating to 16nm. After additional capacity for mature nodes comes online in 2023, network IC prices are expected to face downward pressure arising from gradual market equilibrium, the sources said.