The largest silicon foundry in Taiwan plans to increase the price of its semiconductors by up to 25 per cent, reports claim.

Newspapers in Taiwan say the Taiwan Semiconductor Manufacturing Company (TSMC) will raise prices by between 15-25 per cent from early September. The reports claim the alleged move is in response to the major worldwide shortage in all component sectors, caused by huge increases in demand in the past year.

The reports also warn this is likely to lead to similar price-hikes from rival companies on the island.

But a TSMC spokesman said: "This company has a consistent pricing policy that emphasizes long-standing partnerships with customers and creates win-win solutions for both customers and TSMC.

"Once a price is set, we do not arbitrarily change it when demand goes up."