EUV Blues: Chipmaking Tools Eat Gold, Consumers Pay the Price

The production of chips using cutting-edge process technology increasingly necessitates complex semiconductor manufacturing tools and the cost associated with each new process node is escalating significantly. According to media reports, it is analyzed the manufacturing cost for the 2nm process will surge further compared to the 3nm process, with an expected increase in chip prices by 50%.

Estimates suggest that constructing a 2nm factory with a monthly output of 50,000 wafers would cost approximately $28 billion. In contrast, a 3nm factory with the same capacity would cost around $20 billion. This cost increase is primarily due to the higher number of EUV lithography tools required. The 2nm process demands more precise manufacturing techniques compared to the 3nm process, and to maintain production speed, it inevitably involves the use of more advanced manufacturing technologies. This significantly impacts clients who require advanced process technology for their chip production, such as Apple, which is currently the only company mass-producing chips with TSMC’s latest N3B process.

Further estimates by analysis firms project that the cost per 300mm wafer for TSMC’s upcoming mass-produced N2 process will be around $30,000, compared to around $20,000 for wafers based on the N3B process. This represents a 50% increase in costs, which will ultimately be passed on to the consumer for each chip sold. Analysts believe that the cost of Apple’s 2nm chips will rise from the current $50 for 3nm chips to $85.

Previous analyses by other institutions suggested that the cost per 2nm wafer for TSMC would be $25,000, indicating that the cost increase might not be as significant as projected. Since the 2nm process is not expected to enter mass production until the second half of 2025, the exact extent of TSMC’s cost increase might only be ascertained at that time.