One of the basic principles to offer good prices is that the cost of the entire chip process is very profitable and above all, that the raw materials are at knockdown prices. The semiconductor shortage is joining almost in parallel to that of rare earths and elements that until recently had a good stock now do not have enough tons to supply the industry. For this reason, TSMC has had to make a move and neither AMD nor its buyers are going to like it at all.
The semiconductor shortage takes its toll on TSMC and AMD, Intel and NVIDIA …
TSMC is the world’s largest chip supplier for units manufactured with state-of-the-art lithographic processes. In global computing, Intel is still king, but for unknown reasons they will not follow the same fate as TSMC.
Pat Gelsinger was clear about this almost two months ago when he said that Intel was not going to raise the prices of its processors despite the shortage that the industry has of key elements for the manufacture of semiconductors and therefore chips. They will assume the losses to generate trust in companies and users, but … AMD is not going to be so lucky.
The details and the latest reports coming out of Taiwan ensure that almost all of TSMC’s lithographic processes will see their prices increased, if they have not already done so. As it usually happens, there is a breaking point where the price shoots up and we might think that this fact occurs in the most advanced nodes, but no.
TSMC shoots up costs, AMD, Apple and NVIDIA in check
The biggest buyers of wafers and chips to TSMC are without a doubt AMD and Apple, while NVIDIA only purchases semiconductors for its server GPUs and HPC, so it is much less exposed. The leaked indicates that TSMC’s manufacturing processes above 12 or 16 nm (the first is a direct evolution of the second) will skyrocket in price at an incredible twenty%. If we take into account that 28 nm they are still the best-selling lithographic process yet and overall, millions of devices are expected to see a substantial price increase.
Focusing on CPUs and GPUs, the newer and more evolved processes in production will have a lower rise, specifically the 7% to 9%. This logically includes the company’s 7nm and 5nm and therefore AMD and Apple are in serious trouble here. NVIDIA that will make use of the 5 nm and has already completed the Tape In of Hopper and Ada Lovelace could be thinking that abandoning Samsung has been a mistake seen.
If we take into account that TSMC already withdrew discounts for its large customers at the beginning of the year for 12-inch wafers, we could be talking about a price increase in these of almost a 25% as estimated. TSMC’s motives for this go beyond the semiconductor crisis, as they would seek $ 100 billion in funding for the next three years to compete with Intel and Samsung.
In any case, AMD and Apple products are going to go up in price, everything that has a chip manufactured by TSMC will do so, also consoles. PS5 and Xbox logically. Now it is necessary to know who has the capacity to bear the cost and who will pass it on to the end users.