TSMC to raise 3nm manufacturing costs by 5%, new CoWoS advanced packaging 10-20% in 2025

TSMC's 3nm supply is exceeding demand with major US tech companies like Apple and NVIDIA eating it up, price rises are now on the way.

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TSMC's 3nm supply exceeds demand right now, with major US tech companies including AMD, Apple, NVIDIA, Qualcomm, and more have full production capacity, with orders expected to be filled through to 2026.

TSMC to raise 3nm manufacturing costs by 5%, new CoWoS advanced packaging 10-20% in 2025 141

In a new report from Ctee, we're learning that TSMC's 3nm OEM price adjustment is expected to be "more than" 5%, and that the annual quotation for advanced packaging in 2026 will also increase, between 10-20% or so. TSMC's stock price closed at 922 yuan (around $129 USD or so), leading TSMC's market value to rise to a record 23.91 trillion yuan (around $894 billion USD or so).

Foreign investors have purchased around 395,000 units this year, with TSMC chairman Wei Zhejia's "value theory" cemented in, and will increase the advanced processing and packaging technologies, which is expected to be a "double success".

Not only are increased 3nm foundry prices and advanced packaging production capacity rising at the same time, it's been one year since TSMC opened its Zhunan Advanced Packaging Factory (AP6). The arrival of the new AP6C machines means it has become Taiwan's largest CoWoS advanced packaging facility.

In Q3 2024, it's expected that monthly CoWoS production capacity is expected to increase from 17,000 pieces per month, to 33,000 pieces of month, a rather hefty -- near doubling -- in production capacity.

TSMC's advanced packaging production is scarce, with major customers like NVIDIA leading the charge, accounting for around half of its capacity. AMD is "closely following," reports Ctee, with Broadcom, Amazon, and Marvell all stating they're actively moving into advanced packaging processes.

NVIDIA has a gross profit margin of close to 80% so it will not give up newly opened advanced packaging production capacity, but will "adopt a price increase and profit sharing strategy to grasp more advanced packaging energy" and to "distance itself from competitors".

Ctee continues, adding that the supply chain has also confirmed that TSMC's additional CoWoS-related equipment is expected to be in place in Q3 2024, and requires equipment factories to send more engineers to the Longtan AP3, Zhunan AP6, Zhongke AP5 and other factories. Except for the Zhunan factory AP6C, the Zhongke factory originally only carried out post-processing Duan OS will also gradually convert to the CoW process, and Chiayi will be ahead of Tongluo in the land preparation stage.

TSMC to raise 3nm manufacturing costs by 5%, new CoWoS advanced packaging 10-20% in 2025 142

The prices of advanced processes, including 3nm and 5nm, will "also be adjusted," where, especially in the second half of the year, 3nm orders are strong, and the utilization rate is "almost full and extended to 2025". It's not just 3nm, with 5nm also showing similar trends driven by AI demand.

The shortage of advanced packaging production capacity will continue into 2025, when it's expected to see over 600,000 pieces made. TSMC's supply next year is estimated at 530,000 pieces, so there's still a gap of 70,000 pieces or so... so expect all systems go at TSMC moving forward.

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NEWS SOURCE:ctee.com.tw

Anthony joined the TweakTown team in 2010 and has since reviewed 100s of graphics cards. Anthony is a long time PC enthusiast with a passion of hate for games built around consoles. FPS gaming since the pre-Quake days, where you were insulted if you used a mouse to aim, he has been addicted to gaming and hardware ever since. Working in IT retail for 10 years gave him great experience with custom-built PCs. His addiction to GPU tech is unwavering and has recently taken a keen interest in artificial intelligence (AI) hardware.

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