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Nvidia recently decided to raise the price of its gaming GPUs by 5% to 10% and its chips for AI development by up to 15%. This decision stems from multiple crises that Jensen Huang’s company faced, and a business strategy aimed at protecting profits during uncertain times. Above all, the cause is TSMC’s price increase.
TSMC, the world’s largest semiconductor manufacturer, has increased the price of its most advanced nodes. Its customers will pass this increase along the production, distribution, and sales chains. Nvidia is one of them, as are Apple, AMD, Qualcomm, MediaTek, Broadcom, and Intel, among many others.
TSMC’s Leading Position Protects Its Competitiveness From Price Hikes
TSMC will raise the price of its wafers by 10% in 2025. Asian media outlets specializing in the semiconductor industry have reported this information for several weeks. The claim is credible in the climate of uncertainty triggered by the trade war between the U.S. and China. It’s unclear which nodes the increase will affect. Still, it’s reasonable to assume the hike will gradually extend to all of TSMC’s leading-edge integration technologies.
What prompted TSMC CEO C.C. Wei and the company’s top management to make this decision? Most likely, there’s no single reason. However, TSMC, Nvidia, and most companies directly involved in the semiconductor industry expect the U.S. government to reinstate tariffs on imported semiconductors in July, following a 90-day suspension.
Presumably, the U.S. government will reinstate tariffs on imported chips in July after a 90-day suspension.
Many of TSMC’s customers are U.S. companies. The Taiwanese manufacturer is developing its production infrastructure in the U.S. to shield its business from tariffs imposed by the Trump administration. For now, however, nearly all of its cutting-edge integrated circuits come from plants in Taiwan. Future tariffs will make these products more expensive when they enter the U.S.
Manufacturing chips in the U.S. also costs more than doing so in Taiwan. Therefore, it is unrealistic to expect TSMC’s wafer prices to decrease when its new Arizona plant begins large-scale production of integrated circuits at the N4 (5 nm) node.
Image | TSMC
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