TSMC recently announced its price increase plan in January 2025 to cope with the growing demand for AI and cost pressure of advanced process technology...
Advanced process prices will increase by up to 20% in 2025. Among them, the price increase for advanced process technology orders such as 3nm and 5nm will be between 3% and 8%, while the order increase for AI-related high-performance computing products may be as high as 8% to 10%. In addition, TSMC also plans to increase the price of CoWoS advanced packaging services, with an estimated increase of between 10% and 20%.
In order to meet market demand, TSMC has planned to increase CoWoS production capacity from 36,000 pieces per month to 90,000 pieces, and further targets to reach 130,000 pieces by 2026. Still, demand still outstrips supply, and TSMC has had to raise prices to cope with capacity shortages while dealing with rising costs of expanding production.
TSMC's third-quarter financial report shows that the 3nm and 5nm processes contributed 20% and 32% of the company's wafer sales in the quarter, respectively. This data highlights the importance of advanced process technology in TSMC's business. With the continuous expansion of the AI market, TSMC's CoWoS technology is also facing a situation of supply exceeding demand. At present, many companies including NVIDIA, AMD, Broadcom, Microsoft, Amazon and Google have great demand for CoWoS technology, of which NVIDIA's supply accounts for more than 50%.
TSMC Chairman Wei Zhejia once said that although the market generally believes that TSMC's prices are high, judging from the finished products received by customers, TSMC's prices and wafer quality are worth it, but in the field of mature processes, the company has adopted a profit-sharing strategy: giving about 5% foundry price discounts to large-scale wafer customers. This measure is aimed at maintaining the company's competitiveness in the global semiconductor market, while reducing the cost burden of customers and balancing market demand.