TSMC increases production costs, and GPU and CPU prices may rise

Making 7nm wafers can get up to 10% more expensive

THE Taiwanese manufacturer of TSMC semiconductors (Taiwan Semiconductor Manufacturing Co.) informed the companies with which it has a contract that will increase the price of your chips due to the high production cost, which should also increase the cost of manufacturing CPUs, GPUs, SoCs and controllers.

Companies like Apple that already sell premium products at a very high price will possibly not pass this adjustment on to the final consumer at first, but in the case of Qualcomm and AMD, for example, that configure intermediate steps in the manufacturing chain of different products, can end up reflecting a readjustment in the value of the final products.

Credits: Taiwan Semiconductor Manufacturing Co., Ltd.

According to the DigiTimes website, TSMC has plans to readjust the manufacturing cost of your wafers that use a 7nm process by up to 10%, as processes of 16nm or larger wafers can reach up to 20% for orders placed from December 2021, and supposedly, wafers of 28nm should start to cost US$ 3,000.00 each.


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In the case of processes with 16nm lithography or above, little of this should directly impact the end consumer’s pocket, but considering that most current GPUs and SoCs use 7nm chips, the price of GPUs and other consumer products are subject to a readjustment that could make this market even more expensive already affected by the combination of the semiconductor crisis and the COVID-19 pandemic.

Approximately 49% of TSMC’s $13.29 billion revenue in the last quarter comes from the N5 and N7 manufacturing processes, and the 10% increase has the potential to generate an additional $600 million in the first quarter of 2022, if not reduction in the volume of company contracts. THE Apple is currently one of TSMC’s main contracts, but it will hardly pass the higher cost to the final consumer at the first moment, because you already sell all your products to premium prices with strict value control and without much fluctuation outside the company’s market plan.

Others two large TSMC contracts are from AMD and Qualcomm, which almost exclusively they do not manufacture the final product, but CPU chips, GPUs, SoCs and controllers as an intermediate step in the production chain. Therefore, the increase in cost in these intermediate stages will probably reach partner brands, which in turn will have to weigh how much of it can be absorbed and how much can be passed on to the final consumer.


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Specifically in the case of AMD, a 10% increase in the value of chips at 7nm should directly affect the final value of your entire line of Radeon RX 6000 video cards, beyond the new generation consoles. Both the Xbox Seris X|S and PlayStation 5, currently use AMD SoC at 7nm, and although Sony already has plans to upgrade PlaySation 5 manufacturing to 6nm chip by the end of 2022, so far the Microsoft has shown no interest in migrating its production line as well. for cheaper chips but with higher transistor density.

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Source: Tom’s HARDWARE