Due to the high demand for advanced processors in consumer electronics and high performance computing, TSMC is looking to hike its wafer pricing for all types of customers in 2025, according to a Morgan Stanley note to clients cited by Eric Jhonsa , an investor. Apparently, the world's largest contract maker of chips plans to hike its prices by up to around 10% next year. Keep in mind that the information comes from an unofficial source though so apply the required amount of skepticism.
Negotiations with AI and HPC customers, such as Nvidia, suggest these clients can tolerate approximately 10% price hikes for 4nm-class wafers from around $18,000 per wafer to around $20,000 per wafer. As a result, the 4nm and 5nm nodes, primarily used by companies like AMD and Nvidia, are expected to see an 11% blended average selling price (ASP) hike. This means that prices of N4/N5 wafers may increase by approximately 25% since Q1 2021, at least for some customers.
Although discussions with smartphone and consumer electronics clients, such as Apple, have been challenging, there are signs of acceptance for modest price increases, the report claims. Morgan Stanley expects a 4% ASP increase for 3nm wafers in 2025. While wafer prices depend on actual agreement and volumes, some believe that a wafer produced on TSMC's N3 node costs around $20,000 or higher, but will increase next year. Morgan Stanley believes that companies should be room for companies to 'pass through the additional costs to end users.'
Contrarywise, mature nodes like 16nm are unlikely to experience price increases due to sufficient capacity.
To possibly make its customers a bit more willing to pay extra, Morgan Stanley's recent supply chain investigations indicate that TSMC is signalling a potential shortage of leading-edge capacity unless its customers 'appreciate TSMC's value' to secure their capacity allocation.
Additionally, prices for advanced chip-on-wafer-on-substrate (CoWoS) packaging may surge by 20% over the next two years, Morgan Stanley analysts believe.
In 2022, TSMC raised wafer prices by 10%, followed by an additional 5% in 2023. Looking ahead, another 5% blended increase is anticipated for 2025 in a bid to help TSMC's gross margin rebound to 53% - 54% by 2025.
