TMSC Is Reportedly Terminating Bulk Discounts and Increasing Prices

[erek]

"TSMC traditionally does not comment on unofficial information regarding its prices and it is unclear whether the company omits discounts for all of its customers. Furthermore, it is unclear whether the plan to abandon discounts was caused by overwhelming demand or increased pricing quotes by TSMC's rivals.

Over the past few months numerous reports emerged claiming that demand for basic chips produced on 200mm wafers outpaced supplies, which is why companies like United Microelectronics Corp. had to increase their prices. According to the Central News Agency, UMC has even confirmed hikes of its prices.


TSMC and Samsung Foundry are the only companies that can offer leading-edge production technologies, such as 5 nm, 6 nm or 7 nm. Due to high demand and lack of competition (as it is impossible to switch from one foundry to another quickly), contracts for semiconductors using advanced nodes are now a seller's market. Many fabless chip designers depend on their contractors, and are likely to feel the squeeze.

Rising prices at TSMC, UMC, and other foundries will inevitably affect prices of actual products, but it remains to be seen how significant the effect will be."

https://www.tomshardware.com/news/tmsc-is-reportedly-terminating-discounts-and-increasing-prices

 

[Zarathustra[H]]

Makes sense. The industry has consolidated to the point where it is a sellers market now.

This is why a healthy competitive market needs 3-4 active top competitors. The two we have (TSMC and Samsung) are better than only one, but you don't get the necessary benefits of free market competition unless you have more players.

 

[erek]

Makes sense. The industry has consolidated to the point where it is a sellers market now.

This is why a healthy competitive market needs 3-4 active top competitors. The two we have (TSMC and Samsung) are better than only one, but you don't get the necessary benefits of free market competition unless you have more players.

should we even be thankful that we got $1500 MSRP RTX 3090s for what's about to come ??

 

[Hornet]

I hope Intel can fix whatever issue they are facing with their fab and get back in the competition.
This is bound to happen with the kind of market share TSMC have today.

 

[Mega6]

I hope Intel can fix whatever issue they are facing with their fab and get back in the competition.
This is bound to happen with the kind of market share TSMC have today.

Intel is not going to "save us". There needs to be more players than a few in the game at the cutting edge. Unfortunately due to high fab / research costs, don't see that happening.

 

[erek]

Intel is not going to "save us". There needs to be more players than a few in the game at the cutting edge. Unfortunately due to high fab / research costs, don't see that happening.

arm then?

any chance for risc-v ?

 

[cdabc123]

arm then?

any chance for risc-v ?

Neither of those do much or anything at all to benefit the fab space.

Best we can really hope for at the cutting edge is for Samsung to expand and stay competitive and Intel to maybe get their stuff together. However if Intel manages you can rest assured they will be fabing their own chips.

 

[Zarathustra[H]]

should we even be thankful that we got $1500 MSRP RTX 3090s for what's about to come ??

Unclear to me. I would love to see the a costed bill of materials for a current gen video card.

Of course, Nvidia holds this information pretty tight.

The GPU chips themselves are undoubtedly way more expnesive today than they ever were, due to their large size, the difficulties and costs involved at manufacturing at 7nm, and the associated consolidation of the industry allowing the fabs to charge more.

Even with all of that, it is unclear to me how large part of your $1,500 bill for your RTX 3090 is the GPU chip itself. There are many other components that share in the costs. Ever more expensive complicated multilayer boards, increasingly advanced cooling solutions, and lets not forget the VRAM.

I'm still pretty convinced that no part is the biggest driver of cost in that equation, and that instead the high pricing is primarily driven by Nvidia (and now also AMD) markups and profit margins.

 

[Zarathustra[H]]

Intel is not going to "save us". There needs to be more players than a few in the game at the cutting edge. Unfortunately due to high fab / research costs, don't see that happening.

With all the problems they have had, Intel still isn't using much external fab capacity, instead opting to run at 14++++++++++++ so them fixing their process won't do much about the supply/demand market powers of the two remaining cutting edge manufacturers.

We would need GloFo and maybe even one more to get back into the fray, but they gave up years ago now. If we had 4 players all fighting for 3-5nm processes for the next generation, we'd have more capacity and truly competitive pricing.

 

[Mega6]

With all the problems they have had, Intel still isn't using much external fab capacity, instead opting to run at 14++++++++++++ so them fixing their process won't do much about the supply/demand market powers of the two remaining cutting edge manufacturers.

We would need GloFo and maybe even one more to get back into the fray, but they gave up years ago now. If we had 4 players all fighting for 3-5nm processes for the next generation, we'd have more capacity and truly competitive pricing.

We WILL have capacity - eventually. TSMC is expanding like crazy - which is costing them billions, hence the cost increases.

 

[vegeta535]

Not surprised. When you are the leader and way ahead of everyone you can set the price. Global foundries and Samsung need to get their acts togather.

 

[Zarathustra[H]]

We WILL have capacity - eventually. TSMC is expanding like crazy - which is costing them billions, hence the cost increases.

Agreed. But it will come online more slowly, and at a higher cost than it would if they were concerned about losing market share to a competitor.

 

[[Spectre]]

arm then?

any chance for risc-v ?

They aren't fabs. Intel, Samsung, TSMC, and GlobalFoundries (ehhhhh a bit of a stretch) are the big players who have the ability and resources to keep improving their processes.

 

[[Spectre]]

Not surprised. When you are the leader and way ahead of everyone you can set the price. Global foundries and Samsung need to get their acts togather.

Global has given up on being on the bleeding edge. They are happy sitting on mature processes for things other than the best of the best CPU/GPU production.

 

[Zarathustra[H]]

Not surprised. When you are the leader and way ahead of everyone you can set the price. Global foundries and Samsung need to get their acts togather.

Globalfoundries is never coming back.

They gave up. They stopped investing in new processes. They are happy playing in 12nm low cost production and treating it as a cash cow, rather than doing the difficult job of investing in latest gen processes.

Every gen you fall behind, it becomes that much harder to catch back up again, because now you lack the institutional knowledge that it took to get the previous gen running again.

I will eat my hat if we ever see GloFo compete in bleeding edge process nodes again. It's even starting to get to the point that I am worried Intel won't be able to pull it off. It has been long enough now. Their last good process gen was 14nm. They are two generations behind at this point. And I know that intel traditionally has higher "nm numbers" on their processes than the competition for the same level of capability, but still.

 

[HockeyJon]

Makes sense. The industry has consolidated to the point where it is a sellers market now.

This is why a healthy competitive market needs 3-4 active top competitors. The two we have (TSMC and Samsung) are better than only one, but you don't get the necessary benefits of free market competition unless you have more players.

Especially when those two still can’t meet the market’s demand. I agree, this makes complete business sense from TSM’s standpoint. You don’t offer discounts unless you have to.

 

[HockeyJon]

arm then?

any chance for risc-v ?

ARM only designs, they don’t build. If Nvidia’s bid gets approved, this will remain the same, since Nvidia also outsources construction.