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The Taiwan Semiconductor Manufacturing Company (TSMC) is charging as much as $30,000 per 2-nanometer wafer, suggests a report from the Korean media. TSMC is the world's leading contract chip manufacturer, and it is charging high prices to stimulate competition among top tech firms the likes of NVIDIA, Apple and AMD, says the report. Its approach is in contrast to Samsung's strategy, which relies on lower prices and faster supply response.
TSMC's Arizona Fab Achieves Profitability In Three Quarters, Says Report
According to a report in the Korean press, TSMC plans to charge as much as $30,000 per wafer for its advanced 2-nanometer process. The 2nm technology will enter mass production this year, and the high prices are to maximize profitability by ensuring only firms able to afford the high-end technology will be among its buyers. The first line of new products from TSMC are typically used by Apple, but the report suggests that NVIDIA and AMD might also be in the running for the top-of-the-shelf products.
TSMC"s 2nm yields sit around roughly 60%, the report adds which makes the firm comfortable enough to enter mass production. On the flip side, Korean foundry Samsung which is TSMC's only competitor in the high-end contract chip manufacturing industry, is experiencing 40% yields and is eager to lure customers away from TSMC by offering lower prices and faster delivery. TSMC's stature as the premier chip manufacturer often leads to its capacity being booked in advance, so it appears that Samsung is eager to exploit this and establish a foothold for itself in the budding 2nm market.
Another report, this time from the Taiwanese media, suggests that TSMC's Arizona fab raked in NT$4.2 billion in profit during the second quarter which was the second consequctive quarter for profitability and the first time it contributed to the profit of its parent company. TSMC has long warned about the high manufacturing costs at its American site, but the growing profitability suggests that domestic demand in the US has started to outpace the higher costs.
During the first quarter, the Arizona fab had posted NT$496 million in profit after beginning 4-nanometer volume production in Q4 2024. The fab counts Apple, NVIDIA and AMD among its largest clients, which ensures that it has a steady stream of high-value orders at hand for its output. The American technology companies are also the reason TSMC committed to spending billions of dollars to set up high-end chip manufacturing sites in the US, as the firm's other overseas projects, such as those in Japan, do not make the latest chips.
However, analysts warn that the depreciation costs of the US factories could reduce their profitability in the future. The Japanese site posted a loss in the first half of the year, and TSMC also aims to expand its current US manufacturing footprint by adding two new factories.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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