Following the oversupply of semiconductors, many chipmakers including NVIDIA, AMD, Micron, and Kioxia have cut their quarterly revenue estimates due to reduced demand. Foundries like TSMC and Samsung have also faced similar issues on a smaller scale. Despite this, the Taiwanese foundry plans to raise wafer pricing across the board in the second half of the year. According to rumors, Apple hasn’t agreed to this hike with NVIDIA considering a similar stance.
The latest reports out of China claim otherwise. Apple accounts for 37% of TSMC’s advanced process node revenue. Despite this, TSMC is still pushing for that extra mullah. The two are reportedly still negotiating the final prices of advanced process capacity for the coming quarters. Apple will likely have to agree to a small increase in production costs.
Moving on to other clients like AMD, NVIDIA, MediaTek, and Qualcomm, the report claims that they have no choice but to accept the revised pricing. There is a chance that like Apple, they too will be able to negotiate a milder hike but a hike there will be.
TSMC plans to increase advanced process node prices by 3-5% and mature lithography by 6% in the coming year. Seeing as most cutting-edge CPUs, GPUs, and SoCs are fabbed by the Taiwanese foundry, someone along the supply chain will definitely be cutting corners, or more likely passing it onto the end consumer.
As we have already seen, NVIDIA’s RTX 40 series GPUs (RTX 4080 12GB at $899 and the 4080 16GB at $1,199) are priced well above their predecessors despite not being an out-of-the-ordinary upgrade. Chipmakers also fear that the dreaded wafer shortages of 2019-20 may return as the market adjusts to the post-COVID workflow.