TSMC to increase chip production prices by 10 to 20 percent
TSMC, the world's largest chipmaker, is increasing manufacturing costs by 10% to 20%. That is what several Asian news outlets and the Wall Street Journal have reported.
Digital Times reports that the cost of manufacturing on TSMC's 7nm node and lower nodes will increase by 10%. The Taiwanese publication relies on insider information from the industry. A 16nm process or larger would result in a 20 percent increase in the cost of chips manufactured by TSMC. The Nikkei Asia newspaper also reports on the price increases, while the Wall Street Journal, citing its own sources, indicates the same percentage increases. The story has not received a response from TSMC.
The majority of the price increases would go into effect the following year. According to reports, TSMC is raising prices since the demand for chip fabrication is still quite high. In the meanwhile, it is still unclear whether greater manufacturing costs would be passed directly on to consumers. The price of a console is not directly related to the cost of materials. Apple, one of TSMC's top clients, has a significant profit margin on its devices, which means that the price rise does not have to be passed on to customers right once. Individual components such as processors or video cards, for example, may behave in a different way.
The vast majority of TSMC's revenue comes from the manufacture of tiny components. Nodes N5 and N7 generated 49 percent of the company's revenue in the quarter under consideration. Twenty-five percent of the total turnover was accounted for by processes N16 and N28. According to DigiTimes, some chip manufacturers have raised their pricing in recent months as a result of the high demand that has continued to exist. In addition to TSMC, GlobalFoundries, PSMC, SMIC, and UMC are among the companies involved.
Increased prices would take effect the next year.
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Senior Member
Posts: 1494
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If Apple is willing to pay more, why not require it for everyone else.
Thanks Apple. iphone owners tend to buy new iphone every year more so than Android users. Be interesting to see the numbers.
Senior Member
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o.k. time for a dose of manufacturing reality.
the cost to TSMC has risen.
people look at fabs but do not realize just how much work is done by specialized third parties such as wire bonding.
every piece of silicon that leaves has to be fabbed over the bonded wires that allow I/O including the pins.
and when you reduce the pitch of the node you increase the complexity of the bonding package.
TSMC has several wire bonders specialized for OEM, ARM, ARM M1 (smallest node), and cpu/gpu.
these are tiny companies with profits under 10-20 million US.
they are so specialized that just a few folks ill from Covid screw up the works in an outsized fashion as everything depends on them. and they (the suppliers to TSMC) spent a fortune upgrading their facilities for a covid-safe workplace.
BUT, at the end of the day a 10-20% increase on a smaller node doesn't have to be that great at retail as the cost per WAFER is still a bit lower but with more chips per wafer.
and with AMD fully embracing MCM they are relying on smaller, higher yield chips which mitigates increased cost of production.
Senior Member
Posts: 8230
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I don't give a damn about TSMC shareholders, but seriously...
at this point in time it would be irresponsible from tsmc NOT to raise wafer prices
Senior Member
Posts: 2012
Joined: 2008-07-16
Goodbye cheap computer hardware components, at least for the next several years.
In the end, it will just slow down the upgrade pace for most people... it only sucks when something breaks and one has no choice but to buy the new overpriced stuff.
Oh well, the slow boiling of frogs continues...
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Posts: 3104
Joined: 2016-08-01
No surprise here, unfortunately. This is what happens when production lags severely in relation to demand...
But it´s funny how TSMC suddenly became one of the most important companies in the world just by being competent and choosing their bets and partners wisely.
Yes but again making semiconductors on the cutting edge is a very very hard job . There where what ? 12 fabs most of em went under even the mighty intel that had the best fabs since forever had serius issues making their 10nm to work...intel had the funds to survive a venture that drains em billions with no return for years smaller fabs going belly up with much less. Samsung also can afford to bleed money and tsmc can afford now too mostly they rip the benefits of being the last man standing on this race with the other fabs.