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TSMC to Raise Wafer Prices by 10% in 2025, Customers Seemingly Agree

Taiwanese semiconductor giant TSMC is reportedly planning to increase its wafer prices by up to 10% in 2025, according to a Morgan Stanley note cited by investor Eric Jhonsa. The move comes as demand for cutting-edge processors in smartphones, PCs, AI accelerators, and HPC continues to surge...

www.techpowerup.com

Taiwanese semiconductor giant TSMC is reportedly planning to increase its wafer prices by up to 10% in 2025, according to a Morgan Stanley note cited by investor Eric Jhonsa. The move comes as demand for cutting-edge processors in smartphones, PCs, AI accelerators, and HPC continues to surge. Industry insiders reveal that TSMC's state-of-the-art 4 nm and 5 nm nodes, used for AI and HPC customers such as AMD, NVIDIA, and Intel, could see up to 10% price hikes. This increase would push the cost of 4 nm-class wafers from $18,000 to approximately $20,000, representing a significant 25% rise since early 2021 for some clients and an 11% rise from the last price hike. Talks about price hikes with major smartphone manufacturers like Apple have proven challenging, but there are indications that modest price increases are being accepted across the industry. Morgan Stanley analysts project a 4% average selling price increase for 3 nm wafers in 2025, which are currently priced at $20,000 or more per wafer.

Mature nodes like 16 nm are unlikely to see price increases due to sufficient capacity. However, TSMC is signaling potential shortages in leading-edge capacity to encourage customers to secure their allocations. Adding to the industry's challenges, advanced chip-on-wafer-on-substrate (CoWoS) packaging prices are expected to rise by 20% over the next two years, following previous increases in 2022 and 2023. TSMC aims to boost its gross margin to 53-54% by 2025, anticipating that customers will absorb these additional costs. The impact of these price hikes on end-user products remains uncertain. Competing foundries like Intel and Samsung may seize this opportunity to offer more competitive pricing, potentially prompting some chip designers to consider alternative manufacturing options. Additionally, TSMC's customers could reportedly be unable to secure their capacity allocation without "appreciating TSMC's value."

We gamers just can't catch a break.
And of course, this will affect the PS5 Pro, next gen GPUs and CPUs.

 

[Mr.Phoenix]

Well fuck me... this is what happens when we have got a monopoly. TSMC needs some proper competition and fast.

 

[Loomy]

Well fuck me... this is what happens when we have got a monopoly. TSMC needs some proper competition and fast.

They do have competition coming up. The bigger problem here is capacity and availability.

 

[StereoVsn]

This sucks. TSMC basically got Nvidia margin envy and is hanging up prices on wafers and packaging.

 

[SantaC]

They do have competition coming up. The bigger problem here is capacity and availability.

This has been a problem for many years. Why isnt it solved yet?

 

[demented waffle]

Fuck me.

 

[DryvBy]

Nancy must be eating $10,000 ice cream after this.

 

[ChorizoPicozo]

this gen is going to last 20 years, right?

 

[StereoVsn]

5090 for $2K, here we come.

 

[Kenneth Haight]

There are a good few new factories opening in the US over the next few years but I wonder if they will make any dent in global prices.

 

[demented waffle]

There are a good few new factories opening in the US over the next few years but I wonder if they will make any dent in global prices.

Last I checked, the EPA and DEI were causing problems.

 

[Magic Carpet]

There are a good few new factories opening in the US over the next few years but I wonder if they will make any dent in global prices.

I no longer think they are real.

 

[Gamer_By_Proxy]

this gen is going to last 20 years, right?

Covid alone extended it til 2028 with cross-gen titles until 2030-2031.

 

[Loomy]

This has been a problem for many years. Why isnt it solved yet?

Biggest problem is demand is just beyond huge right now, and has been huge since before Covid. That demand just grew during Covid, and with AI and cars joining the party, and it isn't going down anytime soon. But production stalled during Covid - all the way from getting materials, transport, and manufacture of not just the chips, but the equipment used to create those chips.

Those equipment are rare, expensive, and have very low availability - which is partly why no matter how much and how fast they may want to ramp up, Samsung, TI, Intel, and even TSMC can't quite get there yet.

They also need people uniquely skilled to set up and run those factories.

Last I checked, the EPA and DEI were causing problems.

So no, EPA and DEI aren't the problem. There just aren't enough people qualified to do the job, which is slowing everything down.

Recap:

• Demand is massive and is increasing fast
• Materials, equipment, and labour shortages are making thing harder
  • Both of these will unfortunately continue for a bit longer. Which is why companies are scrambling to reserve allocation.

 

[Playboi Carti]

Next Xbox and PS6 in shambles

 

[Hudo]

Man. GPUs will never be reasonably priced again, it seems...

 

[Loomy]

Man. GPUs will never be reasonably priced again, it seems...

Nope. Just like with everything else, companies now know what we're willing to pay. They're never going back down.

 

[DragonNCM]

There are a good few new factories opening in the US over the next few years but I wonder if they will make any dent in global prices.

US will never be a competitor again to China, Taiwan or S.Korea. That ship floated out long time a go, when US relocated all their major factories in Taiwan, China, S. Korea & Vietnam for more fat profit from labor salaries & cheep materials.
This few factories will not stand chance to make any major dent in global prices.

 

[Physiognomonics]

This has been a problem for many years. Why isnt it solved yet?

Either TSMC is too good, or the others suck or both.

 

[Puscifer]

Nope. Just like with everything else, companies now know what we're willing to pay. They're never going back down.

But they don't realize that it'll come crashing down. People were getting paid stupid high amounts during COVID, look at the car market now and the amount of defaults they're having.

Not saying that people are going to default here, but it's a matter of pricing to the point the product becomes unappealing and they'll have to course correct somehow

 

[willothedog]

This has been a problem for many years. Why isnt it solved yet?

The IP involved in photolithography for wafer production are closely guarded secrets, they have had decades to refine it.

 

[Magic Carpet]

The IP involved in photolithography for wafer production are closely guarded secrets, they have had decades to refine it.

Time for an Oceans 11 team.

 

[DaGwaphics]

Yikes. Glad to have the rebuild already complete.

 

[SHA]

Jensen literally don't want you to upgrade, it's a scam, Nvidia have lost all their credibility in moving forward, that's side stepping tech, not forward tech.

 

[MikeM]

Seems Nvidia and AMD stock like the news.

 

[Badlucktroll]

 

[Wooxsvan]

5090 for $2K, here we come.

 

[Tiago Rodrigues]

One of the reasons why these consoles never go down in price. PS5 Pro will be interesting to see.

 

[Dirk Benedict]

5090 for $2K, here we come.

Easily.

 

[Silver Wattle]

5090 for $3K, here we come.

Ftfy.


TSMC have a monopoly on the cutting edge, Samsung and Intel aren't even close.

This will only get worse unless the big investments in the US fabs can get them caught up.

 

[DaleinCalgary]

Ftfy.


TSMC have a monopoly on the cutting edge, Samsung and Intel aren't even close.

This will only get worse unless the big investments in the US fabs can get them caught up.

That's because TSMC has made investments in equipment that others haven't. This shit costs a ton. I've been there.

 

[GreatnessRD]

We need Intel and Samsung to get on the fuckin' ball. Let's hope Intel truly is parity as they stated in a year.

 

[Elios83]

Lol just what Jen Hsun Huang was expecting to justify a 20% increase in GPU prices 10% for TSMC and 10% for himself because why not?

It will also affect the possibility for console manufacturers to cut prices, making die shrinks using more advanced nodes could basically have the net effect of bringing costs costs up instead of decreasing them.

Basically TSMC needs competition asap.

 

[StereoVsn]

Lol just what Jen Hsun Huang was expecting to justify a 20% increase in GPU prices 10% for TSMC and 10% for himself because why not?

It will also affect the possibility for console manufacturers to cut prices, making die shrinks using more advanced nodes could basically have the net effect of bringing costs costs up instead of decreasing them.

Basically TSMC needs competition asap.

Well, hopefully Samsung and Intel improve their fabs. They are both putting in a lot of money into new production.

It’s just this is not an easy thing to do, it’s very expensive, requires very complex worldwide chain and needs experienced engineers.

For more fun, ASML has virtual monopoly on high end lithography hardware and that is super expensive machinery. Talking over $250mil+ for a single unit. And they got a backlog as well.

 

[Lord Panda]

 

[MrTroubleMaker]

Well fuck me... this is what happens when we have got a monopoly. TSMC needs some proper competition and fast.

don't worry, Winnie the poo will fix the prices when they take over the country...

 

[peish]

Capitalism works, you just gotta work even harder, grind the daily grind bitches

 

[PeteBull]

There are a good few new factories opening in the US over the next few years but I wonder if they will make any dent in global prices.

They wont, they will be at the very least 2 gens behind, aka by the time tsmc will provide us with 3nm graphics cards in 2025 they will maybe give 7nm, gap is simply too big.

 

[PeteBull]

this gen is going to last 20 years, right?

Nopes, unless china tries to take over taiwan/US bombs the hell out of tsmc(i remember they said they rather destroy it vs china getting the tech, official statement btw;p) we gonna get new xbox in 2026 on 3nm(just more expensive, u can forget 500-600$ pricerange), then proper ps6 in 2028 on even smaller process node.

 

[West Texas CEO]

I think the 5090 will be expensive now.

 

[PeteBull]

Capitalism works, you just gotta work even harder, grind the daily grind bitches

Ofc, but u dont see any tech advancements from russia, china, north korea, venezuela or w/e other communist countries we have, all the tech advancements come at a cost of a rat race- enough incentives(financial ones) that ppl around the world are willing to break their backs in order to achieve it.
Same thing with games/dev studios, last good game we got from communist country was tetris, made by 1 briliant guy btw, who got scammed of any profits from that game, pretty demotivating for any1 else who isnt under capitalism aka can actually profit from their game

 

[Rockman33]

Covid alone extended it til 2028 with cross-gen titles until 2030-2031.

Why would covid extend this gen when it was the worst the year leading into the new consoles and the first year of the consoles?

 

[PeteBull]

I think the 5090 will be expensive now.

It was always going to be expensive, as a guy crazy enough to buy 3080ti in the middle of crypto boom for 2200€ i can tell u topend gpu price can be 1500 or 2500$/€, it doesnt matter, as long as its trully powerful/much more than other card ppl will fork up cash for it w/o any concerns.

 

[TheThreadsThatBindUs]

ASML needs to be split up into multiple companies each with full unrestricted access to their patent portfolio.

 

[kazuyamishima]

4TF Nintendo Switch 2 at $299 incoming.

 

[Spukc]

It was always going to be expensive, as a guy crazy enough to buy 3080ti in the middle of crypto boom for 2200€ i can tell u topend gpu price can be 1500 or 2500$/€, it doesnt matter, as long as its trully powerful/much more than other card ppl will fork up cash for it w/o any concerns.

I play terraria on my 4090

 

[Haint]

This has been a problem for many years. Why isnt it solved yet?

Leading edge foundries and the machines in them (which are themselves in incredibly short supply and presold out years in advance) are the most advanced and complex man made inventions in human history by an incredibly wide margin. Makes aerospace look like a child building Legos by comparison. Have you never tried to wrap your head around how they get 80 BILLION transistors placed with sub-atomic precision on a less than 1 inch die....and build many billions of them? You can't just throw up a warehouse and fill it with a bunch of Chinamen, TSMC is absolutely NOT just a Foxcon for chips. Intel and Glofo actually knew what they were doing and still failed catastrophically at shrinking nodes.

 

[Three]

US will never be a competitor again to China, Taiwan or S.Korea. That ship floated out long time a go, when US relocated all their major factories in Taiwan, China, S. Korea & Vietnam for more fat profit from labor salaries & cheep materials.
This few factories will not stand chance to make any major dent in global prices.

The prices are probably increasing due to the tax tarrifs and silicon block on Chinese factories.

 

[Dirk Benedict]

I think the 5090 will be expensive now.

I predict 2000-2499 I am prepared, but this the final hardware/GPU upgrade. The prices of everything have led up to this point, for me.
I would probably upgrade CPU/MB after and that's it. Walking away.

 

[RJMacready73]

Leading edge foundries and the machines in them (which are themselves in incredibly short supply and presold out years in advance) are the most advanced and complex man made inventions in human history by an incredibly wide margin. Makes aerospace look like a child building Legos by comparison. Have you never tried to wrap your head around how they get 80 BILLION transistors placed with sub-atomic precision on a less than 1 inch die....and build many billions of them? You can't just throw up a warehouse and fill it with a bunch of Chinamen, TSMC is absolutely NOT just a Foxcon for chips. Intel and Glofo actually knew what they were doing and still failed catastrophically at shrinking nodes.

Know any good youtubes/blogs that delve into this? i get a lot of it is Top of the Top secret but as you said when you think of what TSMC are doing on a single processor its mindblowing stuff, in the realms of magic.

Also i know one of the reasons China keeps harpin on about taking Taiwan is not to reunify the people it's too get its dirty commie mit's on those chip factories, control the chips control the world! so what is the deterrent to stop that other than war with the US? are the factories/manufacturing components rigged to explode? Also i thought that the US owned a lot of the patents that go into these chips so surely the massive chip factories that Intel are building all over the US will be able to compete or is the tech (which i believe is made in Holland) all owned by TSMC? fascinating stuff