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Home > Industry News

TSMC's 2nm cost spike will impact AI chip market

Views : 63
Update time : 2024-01-02 08:43:15
        As 2023 draws to a close, TSMC will face increased costs for its leading semiconductor manufacturing process. Currently TSMC's most advanced process in production is 3nm, and a report suggests that the cost of the 3nm and 2nm nodes will increase significantly in the future. These potential cost increases could affect the profitability of Apple's high-end and low-end tech products, the analyst report said.
 
 
        3nm is currently the most advanced production process in the world, and TSMC supplies most of its latest products to Apple. In 2022 it was reported that TSMC's 3nm wafer cost would be around $20,000 per wafer, followed by news that the cost per wafer could rise to $25,000 or fall below $20,000 per wafer. With the rise of artificial intelligence (AI) chips stirring up the semiconductor world in 2023, wafer costs will further impact product costing and investment expectations in expensive chip manufacturing facilities. 
        While the IBS report suggests that a 50% increase in the price of 2nm products to $30,000 per wafer will affect Apple the most, companies including AMD and NVIDIA could also face budgetary constraints if the current wave of AI fully materializes in three years' time.
        NVIDIA is already selling AI products based on TSMC's 5nm builds. Industry sources say NVIDIA's next-generation GPUs will use a 3nm process, and the burden of high chip costs will fall directly on Apple's shoulders in the first 2nm production batch. Because their processors and GPUs have higher power and are designed for heavy workloads, AMD and NVIDIA are typically not affected by the high wafer costs of initial mass production of advanced chip technologies.
        However, supply and demand dynamics in the semiconductor market will likely mean that AI chip prices will rise. 3nm wafers at $20,000 each could become more expensive if demand exceeds foundry capacity. Foundries such as TSMC and Samsung have fixed capacity, and if they are confident that demand will outstrip supply, then the initial cost of investing in new facilities is usually passed on to customers as well. 
        TSMC, in particular, will be more cautious before overexpanding production after the nightmare of 2022. Not only has TSMC revised its 2023 revenue forecast several times, but it has also had to deal with overly optimistic customer expectations in the face of an overall chip slowdown in 2022.
        Goldman Sachs previously lowered TSMC's capacity utilization for 3nm and 2nm processes in a report, and TSMC's 2023 3nm utilization estimate was lowered to 36%. Maybe that's why 3nm cost per wafer has not been below $20,000 for more than a year.
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