The Taiwan giant TSMC is reportedly considering raising prices for its in-demand 3nm and CoWoS processes in an attempt to cope with the gigantic demand.
TSMC Plans To Implement 3nm & CoWoS Price Increase Given The Tremendous Demand From The AI Markets
In the modern-day AI markets, TSMC is playing a pivotal role when it comes to providing the essentials in the realm of semiconductors, and the company’s cutting-edge nodes are in significant demand from the markets. Companies like NVIDIA and AMD have their mainstream AI solutions utilizing TSMC’s 3nm process, along with its CoWoS derivatives, so for the Taiwan giant, keeping up with the demand has been quite tricky, which is why a report from Ctee has disclosed that TSMC plans to bump up pricing of 3nm and CoWoS, citing that this move will maintain supply chain balance.
The report says that TSMC plans to implement the price hike in 2025 and has already received approval from NVIDIA, so ultimately, the price change will affect the whole supply chain. It is said that TSMC 3nm pricing is expected to receive a bump of up to 5%, while CoWoS packaging could rise by 10% to 20%, depending upon how the Taiwan giant expands production capacity for its advanced packaging processes.
TSMC has a strong future moving ahead, given that not only has the company “monopolized” the semiconductor markets, but with gigantic demand from the AI segment, TSMC has its production lines booked in the next year as well. The supply chain bottleneck is forcing the company to upscale existing facilities, so a price bump makes sense here.
Morgan Stanley says that TSMC’s gross margins are expected to soar moving into 2025, ultimately translating into solid earnings for the company. In a recent coverage, we reported on how TSMC’s 3nm and 5nm nodes are responsible for more than 52% of the company’s revenue in Q3 2024, which shows the significance of these processes for the Taiwan giant. Apart from this, it is said that TSMC’s next-gen 2nm will be much more disruptive in terms of market demand, so the future of TSMC and the semiconductor markets is indeed bright.