TSMC 3nm supply is tight: NVIDIA, Qualcomm, AMD consider raising AI chip prices

TSMC is absolutely dominating, and we all know it. The big AI chip players are eating up its 3nm production into 2026, and now upstream IC design companies are reporting price increases.

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NVIDIA, AMD, Intel, Qualcomm, MediaTek, Apple, and Google are all working on getting chips made on TSMC's new 3nm process. Ctee reports that Qualcomm's new Snapdragon 8 Gen4 processor is made on TSMC's new N3E process, and its quotation has increased by 25% compared to the previous generation, which Ctee reports "does not rule out subsequent price increases."

Another issue is that semiconductor competitor Samsung led the mass production of 3nm chips using the GAA (Gate All Around) process on June 22, but the first-gen N3 node "SF3E" was not successful at all. The yield rates of Samsung's in-house Exynos 2500 chips dropped, and Google Tensor processors are all made by Samsung. The current fourth-generation Tensor SoC uses Samsung's new 4nm process, but the rumored fifth-generation Tensor chip will switch to TSMC's new 3nm process.

We're going to see a flood of AI chips released this year: Qualcomm Snapdragon 8 Gen4, MediaTek's new Dimensity 9400, and Apple's new A18 and M4 series chips will all be build using TSMC's new N3 family. Qualcomm's new Snapdragon 8 Gen4 chip has "taken the l read in taking the first shot at a price increase," reports Ctee.

Qualcomm's last-gen Snapdragon 8 Gen3 processor was priced at around $200 for the chip itself, but the new Snapdragon 8 Gen4 processor could cost over $250, which would firstly, make new flagship smartphones more expensive, and two, see competitors following with their own chip price increases.

But... we're talking about some of the most advanced technology on the planet, and if TSMC is the only company that the technology companies can go to to get their chips made, this is the price they'll have to pay.

TSMC has a huge 3nm family process, with N3, N3E, N3P as well as N3X, N3A, and more. Existing N3 technology continues to get upgraded, with N3E being mass-produced in Q4 2023, targeting applications like AI accelerators and AI GPUs, high-end smartphone chips, and data centers.

TSMC's new N3P process will enter mass production in the second half of this year, which will enter mainstream applications, including smartphones, consumer products, base stations, and network communication devices in 2026. N3X and N3A nodes are customized for high-speed computing and automotive customers.