TSMC Plans 10% Price Drop for 6/7nm Nodes in 2025

Recent reports indicate that TSMC has reached agreements with a majority of its clients to adjust contract manufacturing prices in response to supply chain reliability demands. The latest market updates highlight these adjustments predominantly affecting the highly sought-after 3nm process nodes, while prices for 6/7nm nodes have declined.

Market analysis reveals that TSMC's current capacity utilization for 6/7nm nodes stands at 60%, prompting a planned 10% price reduction effective January 1, 2025. Conversely, due to robust demand and supply constraints for 3/5nm nodes, TSMC plans to implement price increases ranging from 5% to 10% in 2025.

The increase in prices for 3/5nm nodes is driven by major clients such as Apple, Qualcomm, NVIDIA, and AMD, securing substantial portions of TSMC's manufacturing capacity, resulting in a backlog extending into 2026. Consequently, devices utilizing TSMC's 3nm process, such as Qualcomm's Snapdragon 8 Gen 4, are anticipated to see price escalations, potentially impacting prices of related end-user products.

According to analysts at Morgan Stanley, TSMC's agreements with clients reflect a willingness to pay higher prices for semiconductor manufacturing processes that ensure supply chain reliability and timely deliveries. While specific price hike figures are not confirmed, Morgan Stanley predicts TSMC's profit margins to rise, reaching 55.1% in 2025 and potentially achieving 60% by 2026.

It is noteworthy that price adjustments across the semiconductor industry, involving companies like Qualcomm, and TSMC, are increasingly prevalent. These changes affect various segments, including IC design and chip manufacturing, coinciding with price increases for DRAM and SSD, driven by the surge in AI applications.