In case you’re not familiar with TSMC, this Taiwanese foundry makes chips for a large number of companies. It is the main supplier to Apple, AMD, NVIDIA and Qualcomm, in addition to manufacturing various Intel products.
You should know that the Taiwanese foundry is the only one to offer a production capacity for 3 nanometer chips. Although they have tripled their production capacity, due to the increase in demand for artificial intelligence, they are struggling to meet the demand. This would be one of the factors that would justify the price increase.
TSMC already knows how much more expensive it will make 3-nanometer chips
Thanks to the report just published by the China Times, we know that the price increase is based on reports from this same month. TSMC plans to make its production of solutions based on its 3nm process more expensive. The reason for this increase is the huge demand and the inability to satisfy it.
According to the report, wafers produced in 3 nanometers will increase in price by 5%. Not only will this manufacturing process increase, but so will the encapsulation process.
You should know that the encapsulation process refers to the process of assembling the different elements that make up a chip. TSMC offers the CoWoS process, which is highly regarded within the industry. According to the China Times report, encapsulation could become 10-20% more expensive. This price increase would be associated with an increase in manufacturing capacity.
Currently, TSMC offers a packaging capacity of approximately 17,000 wafers per month. It is reported that it could reach 33,000 wafers per month before the end of the year.
The report highlights that more than half of TSMC’s packaging capacity is allocated to NVIDIA products, followed by AMD solutions in second place. It is worth knowing that NVIDIA and AMD GPUs and AI accelerators rely heavily on these advanced packages because they reduce power consumption, among other improvements.
It is estimated that the production of chips below the 3 nanometer node could increase in the second half of the year. Furthermore, it is highlighted that TSMC’s production capacity under this node would be almost full until 2026.
Industry sources estimate that next year, demand for packaging could be around 600,000 wafers. This is a problem since TSMC would have a production capacity of around 530,000 wafers by 2025.
Any imbalance between supply and demand ends up generating price increases. Although those paying for part of the party will be customers looking to develop systems for AI, the price increase will eventually hit us.
NVIDIA has already warned of a significant lack of stock for the next RTX 50 Series. Furthermore, according to several rumors, Intel and AMD have delayed the launch of their new graphics until the first quarter of 2025. Come on, the Taiwanese foundry was overwhelmed by the circumstances.
