The PC and digital markets are bleak this year, and due to the global economic decline and inflation, the prospects of various manufacturers are not very good. However, in contrast, TSMC, the number one chip foundry, has been making a lot of money. After all, the chip business do

PC and digital markets this year are bleak, and due to the global economic decline and inflation, the prospects of various manufacturers are not very good. However, in contrast, TSMC, the number one chip foundry, has been making a lot of money. After all, the chip business does not have to worry about customers. No matter how bad the environment is, manufacturers still need TSMC to produce advanced chips for themselves. Moreover, semiconductors and chips have been in short supply in the past two years, and TSMC has also taken advantage of the opportunity to increase foundry prices, which has also caused dissatisfaction among many manufacturers.

In the third quarter of last year, TSMC had already raised the price of chip foundry once, with the lowest increase of 10% and the highest increase of 20%. Among them, mature processes rose even higher. This is because the chips of mature processes did have a greater demand than chips of advanced processes, such as automotive chips. The chips with advanced technology rose by 10%. For example, the chips of AMD, Qualcomm , and MediumTek are all in this range of growth. Only Apple is the largest customer of TSMC, so the increase is only 3%, which is considered to have enjoyed VIP treatment.

But now TSMC is planning to raise prices again. The information I have obtained is that TSMC originally planned to raise its quotation next year, with advanced process chips rising by 6%, and mature process chips rising by 9%. This may be because this news made many manufacturers feel dissatisfied, so TSMC revised the increase downward again, with advanced process expected to increase by 3%, and mature process expected to increase by 6%. However, this is still difficult for chip manufacturers who are now in dire straits.

Currently, TSMC's advanced technology several major customers include Apple, AMD, NVIDIA, Qualcomm and MediaTek. Among them, Apple is said to have taken the lead in proposing that it will not accept TSMC's price increase. As TSMC's largest customer now, Apple's attitude is particularly important. Especially next year, Apple's A17 should not adopt TSMC's N3's 3nm process, and it is more likely to turn to the NE3 process in the next year, so this is likely to cause TSMC's 3nm production capacity utilization rate to be insufficient next year. Now Apple's statement that it does not accept price increases is actually unfavorable to TSMC's revenue, but Apple's attitude TSMC must pay attention to it. After all, most of the orders for the most advanced technology are from Apple, so TSMC is likely to continue to give Apple the OEM price this year.

Another manufacturer that directly opposes TSMC's price increase is NVIDIA. NVIDIA used Samsung 's 8nm process before. It is very important that Samsung is cheap enough, but Samsung's 8nm is indeed far from TSMC's new process in terms of performance, so NVIDIA uses TSMC's 4N process on RTX 40 graphics cards, which is also reported to be a 5nm process. In this way, the area of ​​the same transistor is reduced by 15%, but the cost is also increased by 15%. If the chip foundry is increased next year, the price and cost of the RTX 40 graphics card will not be reduced at all, which is obviously something that NVIDIA does not want to see.

For NVIDIA, the RTX 30 is now difficult to clear the inventory of unsold RTX 30, and the RTX 40 is relatively high, and it has encountered a period of PC decline. If the cost increases, it will be difficult for its own operating costs and the sales of graphics card . Therefore, it is reported that NVIDIA has also rejected TSMC's price increase, demanding that it receive the same treatment as Apple.

But for TSMC, the price increase is okay for Apple to relax and compromise with other manufacturers, then this matter cannot be handled. NVIDIA requires not to raise prices to get treatment with Apple. So what should TSMC's second largest customer AMD do? What should we do, MediaTek, TSMC’s third largest customer? Not to mention that Qualcomm, which has now fully turned to TSMC, is not worried about inequality but not even at all. TSMC is now in a dilemma.

The reason why manufacturers resisted TSMC's price increase is due to the environment, but on the other hand, it is also because of other ways of retreat. Although Samsung's chip technology is inferior to TSMC, its price is cheaper than TSMC; at the same time, Intel also needs to start its own chip foundry path, and Intel's 7nm technology can be comparable to TSMC's 4nm. So if TSMC's price continues to rise, it is not ruled out that major manufacturers will turn to seek OEM cooperation between Samsung and Intel.There have been rumors that AMD is dissatisfied with its treatment as TSMC's second largest customer and may turn to Samsung. It will also negotiate with TSMC on the future of advanced technology. So it is hard to say what choices these customers of TSMC will have in the future!