The Taiwan giant is reportedly factoring in a price hike for all of its advanced nodes, as supply chain disruptions have apparently lowered the firm's profit margins.
TSMC's 5nm & Lower Chips Might See a Decent Price Hike, Forcing Big Tech to Pay More For Their Orders
TSMC is currently the go-to spot for semiconductor needs by every major tech giant, and it has the highest market share in customer adoption. More importantly, the demand brought in due to the AI hype has been massive for the Taiwan giant, so there's no more room for orders to be placed. However, the firm and its partners still face US tariffs under their Taiwan operations, and notably, from TSMC's shift from the East to the West, the firm has spent a lot. Now, in a report by DigiTimes, it is claimed that the chip giant is factoring in a 5%-10% price increase across all its high-end processes.
The higher prices have already been communicated to foundry partners, and they include nodes such as 5nm/4nm, 3nm, and 2nm. This means that TSMC's 'trending' customers, such as NVIDIA and Apple, would now need to pay higher prices for their chip needs. Interestingly, the Taiwanese dollar has been appreciated for the past few weeks, which has posed the need to increase node pricing in order for TSMC to sustain its profit margins. It is also claimed that the firm will discounts prices of its older nodes.
Speaking of TSMC's pivot to the US, the Taiwan giant has been showing massive commitment to the region, not only raising its investment to $300 billion but also setting up newer production lines in the Arizona facility to cater to advanced packaging and chip manufacturing. TSMC has intentions to scale up to 2nm in the coming years and, similarly, provide America with an independent packaging supply chain as well. With huge investments onboard, it seems like many experts already anticipated a price hike.
There's no doubt that TSMC doesn't have viable competition for now, which means that it has the 'price game' in its hands. However, we know that the Taiwan giant has been modest with its customers. Despite having more than 50% of the market share, TSMC still sells its processes at a competitive price, which is one of the reasons why the firm is so popular.
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