A new wave of semiconductor price hikes may be about to begin. After Huahong Semiconductor announced its price increase plan, TSMC is also about to raise prices.
According to Taiwan Business Times today, TSMC's 3nm OEM quotation may increase by more than 5%, while Advanced Packaging's annual quotation for next year will increase by 10% -20%. At the shareholder meeting on June 4th, newly appointed Chairman Wei Zhejia, who has just taken full control of TSMC, has "expressed" his intention to raise prices.
Let's talk about 3nm first. TSMC's seven major customers (NVIDIA, AMD, Intel, Qualcomm, MediaTek, Apple, and Google) have taken over all 3nm production capacity and are expected to fulfill orders until 2026. According to analysts, the prices of advanced process nodes at TSMC, including 3nm and 5nm, will be adjusted, with strong orders for 3nm and full load. Similar situations will also occur at 5nm driven by AI demand.
As TSMC's 3nm supply becomes increasingly scarce, customers led by Qualcomm are also starting to raise prices.
On June 13th, Taiwan Business Times quoted supply chain news as saying that the Qualcomm Snapdragon 8 Gen 4 is built on TSMC N3E, with a 25% increase in price compared to the previous generation, which may lead to subsequent price increases. However, the industry also pointed out that the price increase is reasonable because compared to 5nm, the cost price per 3nm wafer is about 25% higher, and this increase has not yet taken into account factors such as the overall number of chips and design architecture.
On the same day, Wccftech pointed out that not only Qualcomm, but Nvidia, Apple, and AMD also plan to increase the prices of popular AI hardware.
TSMC's 3nm family members include N3, N3E, N3P, N3X, N3A, etc. Among them, N3E was mass-produced in Q4 last year, targeting applications such as AI accelerators, high-end smartphones, and data centers; N3P is expected to be mass-produced in the second half of this year and will be used for mobile devices, consumer electronics, internet communication, etc; N3X and N3A are customized for high-speed computing and automotive customers.
TSMC has never commented on single customer messages. As for whether there will be a price increase due to the high demand for production capacity, in order to "reflect value", TSMC emphasizes that "the pricing strategy will always be strategy oriented, not opportunity oriented, and will continue to work closely with customers to provide value.".
In addition to wafer foundry, advanced packaging is also another popular business of TSMC, especially in technologies such as CoWoS.
The AI boom has greatly boosted the demand for CoWoS, and TSMC Q3's monthly CoWoS production capacity is expected to increase from 17000 to 33000 pieces, nearly doubling.
Previously, CoWoS production capacity had already been at the neck of NVIDIA GPUs, which accounted for nearly half of TSMC's advanced packaging capacity. AMD, Broadcom, Amazon, Marvell, and others were also eyeing advanced packaging capacity. The report pointed out that Nvidia did not give up new production capacity, but chose to accept price increases and discounts in order to widen the gap with competitors.
TSMC's advanced packaging production capacity will continue to be in short supply until 2025. Analysts expect the market demand to exceed 600000 pieces next year, and TSMC's supply is estimated to be 530000 pieces. There is still a gap of around 70000 pieces, and the price of advanced packaging is about to increase.
It is worth noting that Wei Zhejia, the newly appointed chairman of TSMC who has recently taken full control, directly stated at the shareholder meeting on June 4th that all AI semiconductors are currently produced by TSMC.
Indeed, Nvidia is not the only company capable of designing AI GPUs, but currently only TSMC is capable of producing AI GPUs - this so-called "monopoly" of uniqueness has also made TSMC stand up for price increases.
"I did complain to '3 trillion man' that his products are too expensive. I think these products are really valuable, but I also want to show him our value."
At that time, Wei Zhe's family had already hinted that they were considering increasing the production price of TSMC's AI chips. After all, considering the high selling price of Nvidia chips and the important role played by TSMC in production, it is easy to come up with the idea of raising substitute prices.