why does it matter: Prices of computer components and other consumer electronics have either risen or stagnated recently. Manufacturers blame component costs, inflation, supply chain shocks and other macroeconomic conditions. Reports indicate that TSMC’s latest node operations will not mitigate the problem.
According to DigiTimes, TSMC intend to sell 3nm N3 semiconductors for $20,000 per chip. Contract prices for big companies like Apple, Intel or Nvidia will likely be lower, but those increased costs will likely pass to consumers regardless.
DigiTimes has charted the history of chip prices, starting with TSMC’s 90nm process in 2004, which cost a tenth of N3 chips at $2,000. It is estimated that N3 chip costs will rise 25% over TSMC’s 5nm N5 process, which was about $16,000 per chip. DigiTimes did not determine if it was responsible for the inflation.
The 3nm node is seeing a price hike mainly because the tools to make it are still very expensive. The scanners TSMC uses for extreme ultraviolet (EUV) lithography cost about $150 million each, and the fabs require multiple scanners. The N5 process requires 14 lithographic layers, while the N3 needs more.
Samsung’s production woes with its 4nm and 3nm processes also leave TSMC unchallenged in the cutting-edge semiconductor space. Qualcomm partnered with Samsung for its new chips, but had to rely on TSMC for it Snapdragon 8 Gen 2 Mobile platform.
While semiconductors are far from the only element affecting component and electronics prices, they will influence the price tags seen by the consumer. After the shockingly expensive RTX 4000 series graphics cards were revealed in September, Nvidia President Jensen Huang announce (Again) Moore’s Law is dead. The jury is still out on this claim, but TSMC’s price hike may give it some extra steam.
Apple may be TSMC’s biggest customer affected by the price increase. The upcoming iPhone 15’s A17 Bionic chip will use the Taiwanese company’s 3nm process, and Apple has reluctantly done so Approved TSMC price hike. Last year, Apple accounted for a quarter of the company’s sales.
More expensive semiconductors can also affect game console prices. Sony a plus PlayStation 5 price in August blame supply chain problems, inflation and manufacturing costs. Microsoft has also admitted that it will eventually have to upload Xbox Series price, likely next year.