TSMC is expected to raise prices of its 2nm wafers, which might lead NVIDIA and Apple to consider using Samsung as an alternative.
TSMC's 2nm Node Is the Industry-Standard, But Its Pricing May Prompt Customers To Look At Alternatives
We know that TSMC is already ramping up volume production of its cutting-edge 2nm process, which is also one of the most advanced technologies in the world. But the latest tech also comes at a high price. This is due to significantly higher demand & markups driven by rising inflation and material costs, which are gripping the industry right now.
As costs continue to rise, TSMC's long-standing customers, such as NVIDIA and Apple, will start looking at alternatives. Korean outlet DDaily reports that Samsung is now being considered a viable alternative to TSMC due to its competitive pricing, opening the door to supply chain diversification as major firms race to secure wafer orders across different semiconductor hubs.
Although TSMC has assured that there won't be any sudden price changes, there are reports that pricing will increase in gradual steps based on market conditions, and that trend so far has only gone upwards.
According to the semiconductor industry on the 12th, observations from within and outside the market suggest that the trend of gradually increasing unit prices for next-generation ultra-fine processes will continue, based on recent remarks by TSMC's top management.
According to analyses by semiconductor market research firms and academic experts, the cost of the next-generation 2-nanometer process is highly likely to be set steeply higher compared to the latest 3-nanometer process currently in mass production. The increased cost of introducing extreme ultraviolet (EUV) lithography equipment due to the transition to ultra-fine processes and the rising difficulty of packaging are cited as the main causes of the unit price increase.
There is a view in the market that as TSMC raises its price barriers, Samsung Electronics' foundry’s reasonable unit price positioning and niche opportunities for the next-generation GAA (Gate-All-Around) process will inevitably be highlighted.
The reason why Samsung is considered a viable alternative to TSMC is due to its price advantage from the utilization of GAA (Gate-All-Around) process technologies for its 2nm and 3nm nodes. With the technology, Samsung reportedly holds much more room for negotiations versus TSMC in terms of unit price.
TSMC will still hold a key technological advantage with its more refined EUV lithography tools and the use of Nanosheets for its 2nm nodes, but once again, these lead to higher costs as more advanced packaging solutions are required.
Although companies like NVIDIA, Apple, and Qualcomm will continue to use TSMC as their primary semi-conductor partner, orders of chips for other markets such as Automobile, Robotics, and Edge AI can be placed at Samsung, where they could be mass produced in the future. These plans are still early, but give you an idea of how Samsung can leverage its position due to the global supply-demand gap & the rising prices that affect almost every facet of the tech industry right now.
About the author: A Software Engineer by training and a PC enthusiast by passion, Hassan Mujtaba serves as Wccftech's Senior Editor for hardware section. With years of experience in the industry, he specializes in deep-dive technical analysis of next-generation CPU and GPU architectures, motherboards, and cooling solutions. His work involves not only breaking news on upcoming technologies but also extensive hands-on reviews and benchmarking.
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