TSMC maintained during "industry slump" by raising prices

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Lakados

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https://www.extremetech.com/computi...e-the-industry-slump-with-higher-wafer-prices

TLDR;
TSMC charged 22% more in 2023 than it did in 2022, so even though orders were down across the board they maintained their numbers.
TSMC raised prices more on newer nodes than they did on older ones
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I still struggle with the concept that they are in a slump.

Latest node wafer production is still WAY too expensive and in WAY too short supply to fill market needs.

There needs to be enough competition and capacity to drive down cost of these wafers to about a quarter of where they are now.
 
Zarathustra[H] said:
I still struggle with the concept that they are in a slump.

Latest node wafer production is still WAY too expensive and in WAY too short supply to fill market needs.
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That’s supply and demand. Low supply means high price.
Zarathustra[H] said:
There needs to be enough competition and capacity to drive down cost of these wafers to about a quarter of where they are now.
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Sure. But who is going to do it? Intel? Samsung?

I’d sooner bet that TSMC just gets more of its own capacity in Arizona (or any other plant set to come online) before any competitor is actually in position to do anything.

Don’t get me wrong. I understand your sentiment. Lower wafer price is good for everyone, I just don’t see a way out of it in the near future.
 
The wafer cost on that chart seems much lower than some have been peddling to justify Nvidia pricing. And this chart is 3nm, I imagine 5nm and Nvidia 4nm are cheaper.
 
Lakados said:
That’s the opposite in this case, customers were cutting back or cancelling their orders so TSMC raised their prices to maintain their revenue.
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In that case it's still economic factors. Basically there is no substitution there. However to my knowledge we're only talking about the most expensive and newest process nodes. It's not as if they raised the prices on older nodes.
 
UnknownSouljer said:
In that case it's still economic factors. Basically there is no substitution there. However to my knowledge we're only talking about the most expensive and newest process nodes. It's not as if they raised the prices on older nodes.
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They did, for the raw wafer portion.
 
Note for some here as the article doesn’t explain it too well.

TSMC charges you twice, once for the raw wafers which you have to buy from them, then the second time for the node you get processed.

So for TSMC 3nm they charge you $6,611 for the wafer, then another $20,000 to process that wafer.

If you go with 5nm they still charge you $6,611 for the wafer but then the processing fee is “only” $16,000. Processing on 7nm is closer to $10,000 right now but those are all expected to go up in March or April.

TSMC’s pricing is relatively flat, so the cost increases to better nodes is proportional to the density, so if you get some 25% more transistors on a wafer going from 5nm to 3nm but you similarly pay 25% more. Not a perfect scaling as they also vary pricing on demand and other things but in general it balances out.
 
GoldenTiger said:
They did, for the raw wafer portion.
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Lakados said:
These are the prices for raw unprocessed wafers. It is unrelated to the processing node.
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Okay that's fair. But then my statement(s) still stand. In order to get a lower price per wafer, there has to be competition that will drive the price down.
If TSMC is the only game in town for these high end process nodes (which they are) then it's not as if in reality there is a "separation" between the "process price" and the "wafer price", because ultimately people are eating the wafer price because they want/need the process.

Otherwise if they don't need TSMC's process, they could move to Samsung which is basically doing everything they can to attract customers.
Lakados said:
Note for some here as the article doesn’t explain it too well.

TSMC charges you twice, once for the raw wafers which you have to buy from them, then the second time for the node you get processed.

So for TSMC 3nm they charge you $6,611 for the wafer, then another $20,000 to process that wafer.

If you go with 5nm they still charge you $6,611 for the wafer but then the processing fee is “only” $16,000. Processing on 7nm is closer to $10,000 right now but those are all expected to go up in March or April.
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You posted this after I wrote the above. Basically: we agree.
 
UnknownSouljer said:
Okay that's fair. But then my statement(s) still stand. In order to get a lower price per wafer, there has to be competition that will drive the price down.
If TSMC is the only game in town for these high end process nodes (which they are) then it's not as if in reality there is a "separation" between the "process price" and the "wafer price", because ultimately people are eating the wafer price because they want/need the process.

Otherwise if they don't need TSMC's process, they could move to Samsung which is basically doing everything they can to attract customers.

You posted this after I wrote the above. Basically: we agree.
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There are lots of wafer producers out there many who actually do higher quality wafers than TSMC does, Intel for example has some stupidly sturdy wafer manufacturing processes. It’s the only reason they can push those poor chips of their half as hard as they do, I mean their actual process may be a full 2 generations behind but the raw silicon is top notch. We can dump on how much electricity an Intel CPU needs to drink to even keep up with the AMD stuff right now but the fact they can lap it up and not catch fire is 100% on the Intel wafer processing.

An Intel wafer on a TSMC process… that would be a sight to see.
 
Lakados said:
There are lots of wafer producers out there many who actually do higher quality wafers than TSMC does, Intel for example has some stupidly sturdy wafer manufacturing processes. It’s the only reason they can push those poor chips of their half as hard as they do, I mean their actual process may be a full 2 generations behind but the raw silicon is top notch. We can dump on how much electricity an Intel CPU needs to drink to even keep up with the AMD stuff right now but the fact they can lap it up and not catch fire is 100% on the Intel wafer processing.

An Intel wafer on a TSMC process… that would be a sight to see.
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Would be interesting to see how TSMC works on that particular section of their fab. Intel bought out all the High-NA EUV lithgoraphy machines from ASML for the next few years. Meaning that TSMC, if they're wise (which I think they are), should be trying to do other process improvements to their fabrication in the mean time. Working on their wafers in the mean time seems like something to spend time developing. Though this is all 100% conjecture. I have no idea what TSMC's plans are from now until they can get equivalent EUV machines online.
 
UnknownSouljer said:
Would be interesting to see how TSMC works on that particular section of their fab. Intel bought out all the High-NA EUV lithgoraphy machines from ASML for the next few years. Meaning that TSMC, if they're wise (which I think they are), should be trying to do other process improvements to their fabrication in the mean time. Working on their wafers in the mean time seems like something to spend time developing. Though this is all 100% conjecture. I have no idea what TSMC's plans are from now until they can get equivalent EUV machines online.
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Well because of aperture sizes the Intel High NA chips have a max size roughly half the size of the TSMC ones so really they can focus on Monolithic chips where Intel will have to dive into their tiled ones.
 
Lakados said:
There are lots of wafer producers out there many who actually do higher quality wafers than TSMC does, Intel for example has some stupidly sturdy wafer manufacturing processes.
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Are you an expert on semiconductor manufacturing? Are there any third-party reports on this topic?

What is Intel's secret sauce?
 
Zarathustra[H] said:
I still struggle with the concept that they are in a slump.
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Old message-thread, but HPC (high performance) was not down, smarthphone-internet of things, digital tv box, television and so on were, we do not follow those has we do HPC (the 7nm and down market).

Sir Beregond said:
The wafer cost on that chart seems much lower than some have been peddling to justify Nvidia pricing. And this chart is 3nm, I imagine 5nm and Nvidia 4nm are cheaper.
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I imagine it is an average for all wafer, from 3nm to stuff in um, 7nm and below revenue sells 4q2023 was a record quarter for them, if that chart was 3nm we would not see a price in 2019 for N3 has it was not sold yet and would have never been cheap like that (probably closer to $20k than $6k). HPC becoming a much higher share of their sales could be why that average price goes up so fast.
 
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philb2 said:
Are you an expert on semiconductor manufacturing? Are there any third-party reports on this topic?

What is Intel's secret sauce?
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Intel no longer makes their own wafers, neither does TSMC, that side of the manufacturing has become as specialized as the etching process with patents for material compositions and silica alloys and purification methods.

But just like any other component there are the companies who make the wafers that cover a whole checklist of capabilities and prices. Intel has gotten very good at knowing who’s wafers will do what and they mix and match them. So a Xeon Platinum isn’t necessarily using the same wafer as a Silver, which isn’t using the same as the mid range consumer stuff which will be different than the mobile ones.

There’s a number of sites out there that cover it, but it’s mostly IEEE papers and the likes.
 
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