In order to maintain its profit margin, TSMC plans to implement a price increase strategy in high-demand products such as 5 and 3 nm nodes.
The Taiwanese chipmaker giant is now in one of its best business conditions due to strong demand in the field of artificial intelligence and orders from companies such as Apple, Nvidia and Qualcomm. In the same vein, TSMC is said to increase the price of advanced processor manufacturing processes by eight percent.
According to the Digitime report, TSMC has announced to its business partners that due to the increase in costs and to maintain a 53% profit margin, it wants to increase the price of products based on three and five nanometer processes between three and eight percent in 2025. This decision can have a significant impact on the price of the CPU.
In addition to semiconductor nodes, the iPhone processor maker is also said to increase the price of its CoWoS packaging. This technology is widely used in AMD and Nvidia AI processors. Apparently, TSMC is developing CoWoS production lines, which will increase the cost of production.
Thanks to a 100% utilization rate of 3 and 5 nm production capacity, TSMC’s revenue and gross profit margin in the second quarter of this year exceeded financial forecasts and market expectations. Experts expect that TSMC’s revenue in the third fiscal quarter will increase by 11% compared to the second quarter, and the company’s gross profit margin will reach 55.5%.
Given TSMC’s unique position in the chip industry, the company is in a good position to take advantage of the market’s excitement. Competitors like Samsung Foundry are significantly behind in terms of technology and customer needs. Therefore, the Taiwanese chipmaker’s customers have accepted the price hike.
