[News] IC Design Companies Adopting TSMC’s 3nm Process Trigger Cost-driven Price Hikes

With the United States expected to further restrict China from acquiring advanced GAA (Gate-All-Around) chip architecture capabilities, coupled with reports of poor yield rates in Samsung’s 3nm GAA generation, the semiconductor industry sources cited in a report from Commercial Times state that TSMC’s 3nm FinFET process is enjoying dominance. Reportedly, due to the high demand and limited supply capacity, upstream IC design companies are beginning to report price hikes.

Seven global tech giants, including NVIDIA, AMD, Intel, Qualcomm, MediaTek, Apple, and Google, are set to gradually adopt TSMC’s 3nm process. As per the sources cited in the report from Commercial Times, Qualcomm’s Snapdragon 8 Gen 4, built using TSMC’s N3E process, has seen a price increase of 25% compared to the previous generation, potentially triggering a subsequent trend of price hikes.

Samsung was the first to commence mass production of 3nm chips using the GAA process in June 2022. However, the first-generation N3 node, SF3E, did not achieve significant success and was initially limited to cryptocurrency applications. Subsequently, the yield rate for its own Exynos 2500 chip also fell short of expectations.

Additionally, Google’s Tensor processors, which are manufactured by Samsung, still use Samsung’s 4nm process in their fourth generation. However, it is said in the report that the fifth generation will switch to TSMC’s 3nm process.

In the second half of the year, numerous AI products will be launched in the consumer market. Among the three major players in the mobile chip market, Qualcomm’s Snapdragon 8 Gen 4, MediaTek’s Dimensity 9400, and Apple’s A18 and M4 series will all be built using TSMC’s N3 family. Moreover, Google’s Tensor G5 will also compete in the market.

It is rumored that Qualcomm’s Snapdragon 8 Gen 4 has already initiated the first wave of price increases. The industry sources cited in the report claim that the procurement cost of mobile chips was already high, with last year’s flagship 8 Gen 3 costing around USD 200. This year’s flagship chip might exceed USD 250. Whether competitors will follow suit remains to be seen.

However, industry sources cited by the report also point out that the price increase is within a reasonable range. Compared to the 5nm process, the cost per wafer for the 3nm process is about 25% higher. This increase does not yet take into account overall wafer quantities and design architecture factors.

TSMC President C.C. Wei has also revealed that TSMC products are highly power-efficient and have better yield rates. When considering the cost per chip, TSMC is the most cost-effective.

Read more

• [News] Major Clients Reportedly Fully Allocate TSMC’s Production Capacity Until 2026, 3nm Process in High Demand
• [News] NVIDIA CEO Jensen Huang Supports C.C. Wei’s Theory and Backs for TSMC to Increase Price

(Photo credit: TSMC)