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Silicon Wafer Prices Expected to Increase by up to 25% by 2025

Silicon wafer
(Image credit: TSMC)

Just when pricing and availability trends for things like CPUs and GPUs seem to be trending in a good direction, a new report warns that silicon wafer prices are set to break records over the next few years. According to the China Times, 12-inch wafer prices will rise past the $200 level for the first time ever in 2024. It adds that all the established silicon wafer makers have signed long-term contracts with their customers to lock in pricing, so extra wafers may be hard to come by.

The expected 20 to 25% wafer price increase between now and 2025 will be precipitated by a perfect storm of circumstances including high/increasing demand, alongside a business cycle mismatch. However, the price of a silicon wafer itself is often but a fraction of the amount paid for the finished product. 

In 2021 and 2022 there has been ample news of new chipmaking factories opening up worldwide. Intel is expanding into Europe, while Samsung and TSMC are establishing considerable US facilities. However, the key input of these advanced chipmakers, silicon wafers, comes from companies like GlobalWafers, Shin-Etsu, and Sumco. These companies don't have expansion plans that align very closely to the chipmakers.

Taiwan's GlobalWafers, a major contributor to the industry, has pre-sold all its wafers through to 2024, says the China Times report. It also heard that Japan's Shengco has its wafer output fully sold up to 2026.

On a positive note, the three major silicon wafer makers "have already collected prepayments from customers and launched a large-scale expansion plan," says the China Times. However, these plans are only going to start to make a difference from 2024 at the earliest.

(Image credit: China Times)

Will a 300mm Wafer That Costs $200 Be a Big Deal?

One must remember that this story is about the fundamental building material for the majority of semiconductors, the highly engineered thin polished silicon disks in diameters up to 300mm. However, there are many other, much larger costs to the chip(s) that will end up in your PC, laptop, or other devices.

The most recent pricing we can find for finished and fully processed TSMC 300mm wafers, for example, is $1,634 (in 2020). To put into this perspective, if TSMC passed on the entirety of the ~$40 wafer price increase to the customer, that would be about a 2.5% rise in cost. In practice, the calculations will be much more complex and vary depending on production node. It must be remembered that the lion's share of TSMC wafer costs passed onto its customers are from its processing and paying off its plant and machinery investments. 

Mark Tyson
Mark Tyson

Mark Tyson is a Freelance News Writer at Tom's Hardware US. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.

  • jkflipflop98
    Considering they're making about $150,000 per wafer, I wouldn't think the price would go up that much.

    Oh well. I hope TSMC keeps raising prices. PLEASE try to wring every penny you can from your customers. I dare you.
    Reply
  • hotaru.hino
    It doesn't help that usable sand is actually starting to become a rare resource.
    Reply