TSMC to Increase Wafer Prices in 2025 with Expected Impact on Various Sectors

TapTechNews July 10th news, according to investor EricJhonsa citing Morgan Stanley's client reports, the global leading chip foundry TSMC plans to increase the wafer prices for all types of customers in 2025, with the highest increase of about 10%.

According to the report, due to the strong demand for advanced processors in the consumer electronics and high-performance computing fields, TSMC intends to raise its overall wafer price in 2025. Negotiations with clients in artificial intelligence and high-performance computing (such as NVIDIA) indicate that these clients can accept an increase of about 10%, for example, the wafer price of 4nm process may increase from about $18,000 to about $20,000. Therefore, it is expected that the average selling price (ASP) of wafers of 4nm and 5nm processes mainly used by companies such as AMD and NVIDIA will increase by 11%. This means that for some customers, the wafer price of N4/N5 process has cumulatively increased by about 25% since the first quarter of 2021.

The report said that although it is quite a challenge to raise prices for smartphone and consumer electronics customers (such as Apple), there are indications that they can accept a modest increase. Morgan Stanley expects the average selling price of 3nm process wafers to increase by 4% in 2025. Although the wafer price depends on the final agreement and output, some in the industry believe that the wafer production cost of TSMC's N3 process may be $20,000 or more, and will definitely increase further. Morgan Stanley believes that enterprises should be able to pass on some of the additional costs to end users.

Unlike advanced processes, due to sufficient capacity, mature processes such as 16nm are not expected to increase in price.

In order to make customers more willing to pay the extra fee, Morgan Stanley's recent supply chain survey shows that TSMC hinted that there may be a shortage of its leading process capacity unless customers recognize the value of TSMC to ensure capacity allocation.

In addition, Morgan Stanley analysts believe that the price of advanced CoWoS packaging may soar by 20% in the next two years.

According to TapTechNews, in 2022, TSMC increased the wafer price by 10%, and an additional 5% in 2023. Looking forward, it is expected that there will also be a 5% comprehensive increase in 2025 to help TSMC's gross margin rebound to 53%-54% in 2025.