[News] TSMC’s 2nm Wafers Reportedly Set to Double in Price, Benefitting IP/ Material Companies

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As TSMC has reportedly begun trial production of 2nm chips in its Baoshan Plant in Hsinchu, northern Taiwan, the schedule of mass producing 2nm in 2025 remains on track. A report by Commercial Times reveals that the price of 2nm wafers is expected to double compared to 4/5nm, which may exceed USD 30,000 per wafer.

While the yield rates for advanced nodes of Intel and Samsung are rumored to be relatively low, the rising price of 2nm wafers reflects TSMC’s market monopoly as well as its strong pricing power, the report notes.

Citing comments by sources from semiconductor companies, the report states that fabs have invested heavily in advanced processes. For instance, the R&D investment of 3nm may exceed USD 4 billion, with key partners in TSMC’s supply chain, such as Taiwanese IP providers and material suppliers, playing a critical role.

On the other hand, executives from IC design houses cited by the report reveal that even from the perspective of IC design, the R&D cost for advanced nodes remains high. For instance, the development cost for 28nm is approximately USD 50 million, while 16nm may require an investment of USD 100 million. For 5nm, the R&D cost has soared to USD 550 million, if the expenditure on IP licensing, software verification, and design architecture are factored in.

According to the report, foundries have invested even more, with research institutions estimating that R&D expenses for 3nm may range from USD 4 billion to USD 5 billion. Additionally, constructing a 3nm fab is expected to cost at least USD 15 billion to USD 20 billion. All these factors may lead to the high pricing of wafers in the advanced nodes.

Therefore, for a foundry, the development of a new-generation of node involves massive efforts, and needed to be supported by partners in three key sectors: equipment, software (including IP and EDA tools), and materials, the report notes. Once their products have been validated by the foundry, suppliers can usually secure long-term partnership.

With 2nm set to debut in 2025, TSMC’s key suppliers are expected to see explosive profit growth, the report indicates. According to the report, Taiwanese IP firm M31, for example, has already developed IP that supports the 2nm platform for both smartphones and high-performance computing. Likewise, eMemory has disclosed that it is collaborating with leading foundries to develop 2nm.

On the other hand, as 2nm processes require thinner wafers, Taiwan-based materials companies, such as Kinik and Phoenix Silicon International Corp., have entered the markets of diamond discs and reclaimed wafers.

According to the report, in terms of reclaimed wafers, the market value for 2nm is approximately 4.6 times that of 28nm. In addition, the number of dummy wafers will also increase in advanced processes, which benefit suppliers with more volume and higher average prices.

Read more

• [News] TSMC Reportedly Mulls to Offer Discounts on Mature Nodes, Particular for 7nm/14nm Orders
• [News] TSMC’s Newly Acquired AP8 Facility in Southern Taiwan Rumored to Start Production in 2H25

(Photo credit: TSMC)