TSMC's price increase for several processes is now going to be higher than expectations, as the firm navigates its way towards immense demand.
TSMC To Increase Prices For 5nm & Lower Nodes To Cater to The Demand, CoWoS Pricing to Be Increased As Well
Well, semiconductors aren't going to get cheaper anytime soon, especially the higher-end nodes from the likes of TSMC. There's no doubt that the Taiwan giant sees massive demand from the global markets for its processes, with primary customers being Apple, NVIDIA, and many other tech companies. However, it seems like TSMC's clients would need to pay more to get cutting-edge nodes, as based on estimates by Goldman Sachs (via Taiwan Economic Daily), it is claimed that TSMC might raise CoWoS and prices of high-end processes by a higher percentage than expected mainly due to the recent appreciation of the Taiwan Dollar.
It is estimated that the prices of processes below 5nm will see a YoY increase of 3%, while CoWoS will see an increase of 5%; however, these percentages could go higher if TSMC factors in the currency gains and counteracts on their gross margins. And given that Big Tech has no other options than TSMC for high-end process needs, they would ultimately need to comply with the price increase. The demand for TSMC's products are higher than ever, and with the AI hype, the firm has seen a much more elevated status in the market, when it comes to adoption from customers.
The dynamics of the chip industry are way too concentrated towards TSMC right now, as the firm is expected to take over 75% of the foundry market in the upcoming years, likely being the only option available to Big Tech for their cutting-edge needs. In a previous report, we discussed how Needham analyst Charles Shi predicted that TSMC's revenue could hit up to $160 billion in 2027, fueled by the demand for AI, and of course, how competitors like Intel and Samsung hasn't managed to do much in the segment.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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