World’s Largest Semiconductor Maker Plans Price Increases

Taiwan Semiconductor Manufacturing Co.’s Pricing Power

Taiwan Semiconductor Manufacturing Co. (TSM), the world’s largest contract chip maker, is increasing its prices by as much as 20%. This could result in higher price tags for consumers buying electronics.

The company is known for supplying chips to Apple (AAPL) and other tech giants. TSMC supplies over 90% of the world’s most advanced chips, so it has significant pricing power. The company will bump the prices of its most advanced chips by about 10% while the cost of its less advanced chips will be 20% higher. The change in prices is expected to take place late this year or early next year.

The Chip Shortage’s Impact Across Industries

TSMC’s announcement comes as a variety of industries continue to deal with a global semiconductor shortage. The shortage has impacted electronics companies as well as carmakers.

This month, General Motors (GM) idled three of its North American factories specializing in pickup trucks, its most profitable vehicle. Last week, Toyota (TM) also announced plans to scale back production by 40% in September.

Looking Ahead

TSMC’s motivations for the price increase are twofold. The company hopes that higher prices will drive down demand and alleviate the shortage. The company also plans to invest revenue from the increased prices into expanding manufacturing capacity.

Over the next three years, TSMC plans to invest $100 billion in new factories and equipment. It is increasing production capacity in Nanjing, China, and has started building a $12 billion production facility in Arizona. These moves will likely help alleviate the chip shortage in the long term. But in the short term, TSMC’s higher prices may trickle down to consumers.

Reset Your Career with Lindsay Pollak, author of “Recalculating”

In the first event of our series “Reset! Recharge! Reimagine!” author Lindsay Pollak will discuss how to navigate your career through the ever-changing work world.

Retailers Increase Profit Margins on Ecommerce Orders

Stores Hone Ecommerce Strategies

A number of large retailers have blown past earnings expectations recently. When consumers began to feel more comfortable shopping in-person in the spring, sales surged due to pent-up demand. However, analysts are also seeing another trend which may be more long-lasting.

Retailers are finding ways to widen margins, particularly through ecommerce sales. Many retailers struggled to make the rapid shift to doing business online in the early days of the pandemic. But now they have developed strategies to help boost profits from online sales, including shipping online orders from stores and offering curbside pickup to save on delivery costs.

Dick’s Sporting Goods Surpasses Expectations

Dick’s Sporting Goods (DKS) reported earnings earlier this week. The company smashed Wall Street expectations, causing its share price to hit an all-time high. The retailer’s sales were up 21% compared to a year ago. Even more impressive, its profits surged almost 80% compared to a year ago.

Dick’s Sporting Goods’ CFO said that profits from online sales are now close to profits from in-store sales. This is partially thanks to the fact that the company has set up ways for customers to pick up their own online purchases at stores.

Target’s Ecommerce Approach

Dick’s Sporting Goods is not the only retailer developing strategies for making online sales more profitable. Target (TGT), which gained considerable market share during the pandemic, has also raised its profit margins on ecommerce sales. The retailer has achieved this, in part, by fulfilling over 95% of its second-quarter sales in stores.

Retailers have dealt with significant challenges and uncertainty over the past year and a half. They have found numerous ways to adapt to new market conditions. They will need to continue to be adaptable heading into the fall due to questions surrounding economic recovery, Delta variant cases, consumer confidence, and other factors.

Friday Fundings: Cribl, Calibrate, and Coco

Data Solutions Company Raises $200 Million

Cribl is a startup building ways to parse and route companies’ data safely and efficiently. The company recently secured $200 million in a Series C funding round, withGreylock and Redpoint Ventures co-leading the round. Cribl’s customers include Whole Foods (AMZN), Vodafone (VOD), and Fannie Mae (FNMA).

Both because of remote work and because of a recent increase in cybersecurity attacks, companies are looking for ways to protect their data. But sometimes the solutions they find mean that data is difficult to access. Cribl wants to keep data secure for companies while making the process of accessing data hassle-free.

Holistic Weight Loss Platform Raises $100 Million

Calibrate, a health and weight-loss startup, has raised $100 million in a Series B funding round co-led by Founders Fund and Tiger Global. This brings the company’s total funding to $127.6 million.

Calibrate is attempting to disrupt the $70 billion weight-loss industry by taking a more holistic approach than other programs. The COVID-19 pandemic prompted many consumers to think deeply about their health and habits. Many of them turned to Calibrate.

The company is projecting $21 million in revenue for 2021. With its new funding, the company plans to build out a pharmacy arm, and add to its revenue streams in other ways.

Robotic Delivery Company Secures $36 Million

Coco, a startup building last-mile delivery robots, has raised $36 million in a Series A funding round. The round was led by Sam Altman, Silicon Valley Bank (SIVB), and Founders Fund.

As ecommerce continues to gain ground, robotic delivery is becoming a highly competitive industry. In contrast to some of its rivals which are building fully autonomous vehicles, Coco’s technology utilizes remote drivers.

The company has partnered with a number of restaurants including the California chain Umami Burger. With its new funding, Coco plans to increase its headcount and form more partnerships.