Connect with us

Company News

TSMC to raise 3nm chip prices by over 5% next year

Fresh rumors from Taiwan indicate that the Taiwan Semiconductor Manufacturing Company (TSMC) is gearing up to increase prices for its leading edge 3-nanometer semiconductor products. TSMC’s 3-nanometer is the latest chip manufacturing technology in the contract manufacturing industry, and the firm’s dominant market position means that the bulk of orders from large technologies companies head its way.

Some of TSMC’s high profile customers include Apple and NVIDIA, and while earlier reports this month have speculated at a 3-nanometer price increase, this is the first time supply chain sources have also mentioned some specifics for the purported decision.

TSMC is set to increase the prices of its 3-nanometer products at a time when it is facing strong demand in the market for the products. 3-nanometer prices are slated to increase by 5%, and it will be accompanied by a much higher increase in advanced packaging prices next year.

Packaging, which refers to the process of assembling the chips into packages that can be used by a computer, has come into the spotlight due to the booming demand for AI products. China Times’ sources believe that TSMC will increase its packaging prices by between 10% and 20%, and this increase will accompany a corresponding growth in packaging capacity as well.

Specifically, the sources believe that by this year’s third quarter, TSMC’s packaging capacity should grow to 33,000 wafers per month from the current 17,000 wafers per month to nearly double.

The report adds that roughly half of TSMC’s advanced packaging capacity is for NVIDIA’s products, with AMD following in second place. As opposed to the smartphone processors ordered by Apple and Qualcomm, AI GPUs and accelerators made by AMD and NVIDIA are more dependent on advanced packaging as they consume more power and have far more stringent performance requirements.

Demand for 3-nanometer products is expected to grow during the second half of this year. As rumored earlier, utilization for 3-nanometer is nearly full until 2025 and 2026, with the same also expected for advanced packaging products. Sources believe the demand for packaging is expected to sit at roughly 600,000 wafers next year, which is 70,000 short of TSMC’s capacity of 530,000 pieces.

A demand supply mismatch that tilts on the demand side leads to higher prices as manufacturers invest more to grow their capacity. NVIDIA’s shares have posted triple digit percentage gains over the past year or so as analysts and investors expect the firm to play a crucial role in what its CEO describes as the global shift to accelerated computing. AI chips from the firm are in high demand, with big ticket names such as Microsoft backed OpenAI, Facebook parent Meta and electric vehicle and self driving technologies firm Tesla all competing for the latest GPUs to train their AI products. WCCFtech

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2024 Communications Today

error: Content is protected !!