TSMC 3nm Prices Up 5%, Advanced Packaging Up 20%

TSMC is set to implement price increases across its services. Notably, the price for its 3nm process is projected to rise by over 5%, while advanced packaging services are expected to see a price increase of 10-20% next year.

Major clients, including Apple and NVIDIA, have secured TSMC's entire 3nm production capacity, leading to a significant supply-demand imbalance, with full order books anticipated through 2026. This strong demand is expected to drive up the prices for TSMC's 3nm foundry services.

Industry experts indicate that prices for advanced process nodes, such as 3nm and 5nm, will be adjusted. Particularly, the latter half of the year has seen robust demand for 3nm orders, with capacity utilization nearing full load and projected to remain high through 2025. The 5nm process is experiencing similar trends, fueled by increasing AI demand.

Recent reports from the supply chain revealed that Qualcomm’s Snapdragon 8 Gen 4, built on TSMC's N3E process, experienced a 25% price increase compared to its previous generation. This significant price hike may set a trend for future pricing. Industry analysts deem this increase reasonable, given that 3nm wafers are about 25% more expensive than 5nm wafers, without factoring in overall wafer quantity and design architecture.

Moreover, the introduction of extensive AI training models and the growing need for powerful computing data centers are driving up demand for AI accelerator hardware. This surge in demand has resulted in persistent high demand for TSMC’s CoWoS advanced packaging capacity.

Market demand for next year is estimated to exceed 600,000 wafers, while TSMC’s supply is projected to be around 530,000 wafers, leaving a shortfall of approximately 70,000 wafers. Consequently, advanced packaging prices are expected to rise soon.

Additionally, TSMC's Zhunan advanced packaging plant (AP6) has been operational for a year. With the gradual installation of equipment for its third phase (AP6C), it has become the largest CoWoS base in Taiwan. The monthly CoWoS capacity is expected to increase from 17,000 wafers to 33,000 wafers in the third quarter.