NXP Semiconductors raising prices after product shortages, cost increases - letter

FILE PHOTO: A man works on a tent for NXP Semiconductors in preparation for the 2015 International Consumer Electronics Show (CES) at Las Vegas Convention Center in Las Vegas, Nevada, U.S. on January 4, 2015. REUTERS/Steve Marcus

(Reuters) - Dutch automotive chip supplier NXP Semiconductors has told customers that it must raise prices on all products because it is facing a “significant increase” in materials costs and a “severe shortage” of chips, according to a letter to its customers seen by Reuters.

“To address the unforeseen increase in costs from our suppliers, we reluctantly must raise pricing on all products,” the Nov. 26 letter to the chipmakers customers said. NXP confirmed the authenticity of the letter but declined to comment further.

Volkswagen AG said Friday that a global chip supply shortage could lead to interruptions in automobile production in China.

Reporting by Stephen Nellis in San Francisco and Yilei Sun in Beijing; Editing by Chizu Nomiyama