Taiwan Semiconductor mulls price hikes for 3nm chips - report
Taiwan Semiconductor Manufacturing (NYSE:TSM) is planning to raise the price of its 3nm chips by over 5%, while advanced packaging prices are expected to increase by 10% to 20% next year, TrendForce reported.
The products under TSM's 3nm family include N3, N3E, N3P, and N3X and N3A. The existing N3 technology continues to be upgraded, N3E, and its mass production had started in the fourth quarter of last year. The tech is aimed at applications such as AI accelerators, high-end smartphones, and data centers, TrendForce added citing a report from Commercial Times.
N3P is slated for mass manufacturing in the second half of 2024 and is anticipated to become mainstream for applications in mobile devices, consumer products, base stations, and networking through 2026, according to the report.
N3X and N3A are customized for high-performance computing and automotive clients.
TSM's Zhunan advanced packaging plant, AP6, has been operational for a year now, and has become Taiwan's largest chip-on-wafer-on-substrate, or CoWoS, base with the equipment moved into its AP6C facility. In the third quarter, CoWoS monthly manufacturing capacity is anticipated to almost double to 33,000 wafers from 17,000, the report noted, citing industry sources.
TSM's advanced packaging capacity is scarce, with main customer Nvidia (NVDA) having the highest demand, occupying about half of the capacity, followed by Advanced Micro Devices (AMD). Broadcom (AVGO) Amazon (AMZN) and Marvell Technology (MRVL) have showing interest in using advanced packaging processes. With gross margins around 80%, Nvidia is said to agree to price increases to secure more advanced packaging capacity, the report added.
The prices for 3nm and 5nm process tech will also be adjusted. Mainly, the strong demand for 3nm orders in the second half of 2024 is anticipated to steer utilization rates to near full capacity, extending through 2025. The 5nm process is seeing similar demand dynamics, driven by AI requirements, the report added.