Currently, the global semiconductor industry is entering a new period of transformation. With the rapid development of AI, big data, cloud computing, and other technologies, the demand for high-performance computing chips, optical communication chips, and advanced packaging has surged, and recent reports suggest that prices for these types of chips are increasing.

Advanced Process and Advanced Packaging Products May See Price Increases

According to a recent report by Morgan Stanley, TSMC is considering raising prices for its 3nm process and CoWoS advanced packaging technology in response to soaring market demand. TSMC plans to implement these price increases in 2025, with the cost of its 3nm process potentially rising by up to 5%.

Industry analysts point out that on the demand side, major AI chip manufacturers such as NVIDIA and AMD heavily rely on TSMC’s 3nm process, and the explosive growth in AI technology has driven continuous demand for these chips, contributing to the price increase.

On the supply side, the high research and production costs associated with advanced process technology—including equipment investment, material costs, and R&D personnel—add significant pressure to the supply chain. Multiple factors have led to a tight supply of such chips, further driving up prices.

Additionally, TSMC’s 5nm and 4nm process quotes have increased more than previously anticipated by 4%, with some price hikes reaching as much as 10%.

Reports indicate that TSMC also plans to raise prices for its CoWoS advanced packaging technology, with potential increases between 10% and 20%. High demand for CoWoS from major companies like NVIDIA, AMD, Microsoft, Amazon, and Google has resulted in a shortage of CoWoS packaging capacity, which has driven up prices.

According to TrendForce research, NVIDIA is the primary driver of demand for CoWoS, and with the upcoming launch of its Blackwell series, demand for CoWoS is expected to increase by more than 10 percentage points annually by 2025.

Optical Communication Chip Sector Begins Price Increases

Demand for high-speed, high-bandwidth, and low-latency optical communication is rising, particularly in data centers, enterprise networks, and telecommunications, driving demand in the optical communication chip market. Recently, media reports revealed that Marvell, a major optical communication chip manufacturer, has issued a price increase notice, with its entire product line set to see price hikes starting January 1, 2025. According to TrendForce, Marvell ranked sixth in the global IC design market in 2023.

Industry forecasts predict that, driven by ongoing advances in optical communication technology and expanding applications, the global optical communication chip market will grow rapidly in the coming years.

The development and application of technologies such as silicon photonics, optoelectronic hybrid integration, and high-performance photonic chip materials are expected to bring new growth points and opportunities to the optical communication chip market.

(Photo credit: Marvell)

Media report that researchers at the University of Chicago and Argonne National Laboratory (ANL) have developed a new optical storage technology that could surpass the density limitations of traditional optical disks, achieving ultra-high-density storage.

In the past, a key challenge for traditional optical storage was the diffraction limit of light. Since the size of each data unit cannot be smaller than the wavelength of the read-write laser beam, there is an upper limit to the density of current optical storage.

The researchers proposed a method to circumvent this limitation by using wavelength-division multiplexing. They embedded rare-earth emitters, such as magnesium oxide crystals, within the material. Each emitter uses a slightly different wavelength, allowing more data to be stored within the same physical space.

The report states that researchers initially modeled and simulated the physical principles of this technology and designed a theoretical solid material containing rare-earth atoms. This material can absorb and re-emit photons, while nearby quantum defects can capture and store these photons. One significant discovery was that when defects absorb narrow-wavelength energy from nearby atoms, their spin state flips. Once the spin state flips, it is nearly impossible to revert, which means these defects can store data for an extended period.

The report emphasizes that, although this is a promising initial test, there are still some key issues to address before commercialization. For instance, the durability of these emitters needs to be verified. Additionally, the researchers have not provided specific capacity estimates, merely suggesting the potential for “ultra-high density.” Despite these challenges, the researchers are optimistic about the future of this technology, calling it a major advancement in storage technology.

 
 
(Photo credit: IBM)

According to a report by the Economic Daily News, U.S. chip giant Marvell Technology has announced that it will raise prices across its entire product line starting January 1 next year, marking the first major price hike in the optical communications sector.

Marvell’s strong financial performance last quarter, fueled by surging demand for AI-related products like ASICs and silicon photonics for data centers, surprised the market. The decision to raise prices is seen by industry insiders as not only a move to capture emerging opportunities but also a reflection of the continued investment in cutting-edge and innovative product development to meet growing market demand.

The Economic Daily News cited a leaked price hike notification letter signed by Marvell’s Senior Vice President of Global Sales, Dean Jarnac. The letter highlighted that the global demand for accelerated computing and AI is driving unprecedented investments across the semiconductor supply chain, including expanding production capacity and establishing diverse manufacturing bases. Marvell is no exception, and it plans to continue investing heavily in innovation to deliver advanced products and technologies to its customers.

Jarnac explained that the price increases, effective January next year, are necessary to support expanded investment levels. He assured customers that Marvell will minimize the price hike’s impact as much as possible and urged them to place orders based on delivery schedules and provide accurate demand forecasts.

Marvell’s stellar quarterly results were driven by the booming AI demand, which boosted its data center business far beyond market expectations. Key growth drivers included optical products like 800G PAM and 400ZR data center interconnect (DCI) solutions.

“Marvell’s second quarter revenue grew 10% sequentially, above the mid-point of guidance driven by strong demand from AI. We saw strong growth from our electro-optics products, and our custom AI programs began to ramp,” said Matt Murphy, Marvell’s Chairman and CEO, in an August press release. “Next quarter, we expect our combined enterprise networking and carrier end markets to return to growth, while our data center end market growth accelerates. As a result, for the third quarter of fiscal 2025, we expect all our end markets to grow sequentially, with consolidated revenue forecasted to grow 14% sequentially at the mid-point, accompanied by a significant increase in operating leverage.”

(Photo credit: Marvell)