TSMC’s 3nm Solo Leads Price Hike Trend

TSMC’s 3nm Solo Leads Price Hike Trend

The U.S. plans to further limit mainland China’s ability to acquire advanced gate-around-gate (GAA) chip architecture, and along with noise about the low yield of Samsung’s 3-nanometer GAA generation, chip industry officials have begun reporting price increases for upstream IC design firms because TSMC’s 3-nanometer pin exceeds supply as field-effect circuit crystal (finFET) process enjoys dominance.

The world’s seven largest tech giants – Nvidia, AMD, Intel, Qualcomm, MediaTek, Apple, and Google – will gradually introduce TSMC’s 3nm process. According to the supply chain, the Qualcomm Snapdragon 8 Gen 4 is built with TSMC N3E and estimates are 25% higher compared to previous generations, which cannot rule out subsequent price increases.

Samsung took the lead in mass production of 3-nanometer chips using the GAA process in June 2022. However, the first-generation N3 node SF3E was not very successful and had insufficient coverage. Later, its own Exynos 2500 chip yield did not meet the standard. In addition, all Google Tensor processors are manufactured by Samsung, but the fourth generation still uses Samsung’s 4-nanometer process, and the fifth generation is rumored to be transferred to TSMC 3-nanometer.

At this stage, only TSMC is dominating the 3-nanometer wafer foundry process

In the second half of the year, many AI products will hit the consumer market. Among them, Qualcomm Snapdragon 8 Gen 4, MediaTek Dimensity 9400, and Apple A18 and M4 series, all of the top three products in the mobile phone chip market, will be released. Google’s Tensor G5, built using TSMC’s N3 lineup, will also be like AI GPU chips, and anyone who secures production capacity will win the world.

Qualcomm’s Snapdragon 8 4th generation is rumoured to have taken the first step in price increases. The supply chain has frankly acknowledged that the original purchase price of the phone chip is already very high. Last year’s flagship 8 Gen 3 purchase was around $200 and this year’s flagship chip may top US$250. We’ll follow suit.

However, the tech industry noted that the price increases are within reasonable range, mainly because the cost of each 3nm wafer is about 25% more expensive compared to 5nm and these price increases did not take into account factors such as the total number of wafers and design architecture

TSMC Chairman Wei Zhejia also stated that TSMC’s products are very power-saving and have relatively good yields. Looking at each die, TSMC is the cheapest. In addition, through quarterly developments and year-over-year improvements, TSMC has always provided its customers with the most advanced technologies and the most reliable yields.

Industry officials pointed out that major IC design companies have started to raise prices, and it will be up to the brand owner to decide whether the additional cost will be passed on to the consumer or whether to cut the overall price of the machine.