TSMC will increase its price for chip production, CPU and GPU may be more expensive
In the past year, in addition to various shortages in the semiconductor industry, price increases have also often appeared. For example, UMC has raised prices several times during this period, very frequently. It even signed an agreement with the chip design company to bind the interests of both parties, adopting the capacity margin model, and paying a certain percentage of the advance payment for the planned chip production in the future, to avoid supply chaos caused by demand growth or market price fluctuations, guarantee the supply of basic production capacity within a few years.
The industry giant TSMC cannot avoid price increases. After all, the demand for semiconductor production capacity in various industries is very strong at this stage, not to mention TSMC has the best advanced technology. According to DigiTimes reports, a chip design company said that TSMC is preparing to increase prices significantly from 2022. It plans to increase the production price of wafers with 7nm or more advanced technology by 10%, and the production price of wafers with 16nm or above by 20%. TSMC, like other foundries, will not publicly disclose its quotations, but there is news that starting from January next year, the price of wafers using the 28nm process will increase to nearly $3,000.
According to TSMC’s second-quarter 2021 financial report, of its $13.29 billion in revenue, N5, and N7 process nodes accounted for 49% of its revenue. Assuming that sales in the first quarter of 2022 remain unchanged, and the quotations of these process nodes increase by 10%, it means that there will be an additional $600 million in revenue in the first quarter of 2022. In the same way, TSMC’s N16 and N28 process nodes accounted for 25% of revenue during the same period, and a 20% increase in quotation means that revenue will increase by more than $1 billion.
Regardless of CPU or GPU, a considerable part of it currently relies on TSMC’s production capacity, and eventually, many consumers will pay for it.
