TSMC’s Planned Price Increase
TSMC is planning to raise its wafer prices by up to 10% in 2025. This increase affects its advanced 3nm and 4nm process nodes, which are critical for manufacturing high-performance chips used in flagship smartphones. For instance, the cost of 4nm-class wafers is expected to rise from $18,000 to approximately $20,000. This marks a 25% increase since early 2021 and an 11% rise from the last price hike.
Impact on Smartphone Prices in Southeast Asia
The price hike is anticipated to affect major smartphone brands, including Samsung, Xiaomi, OPPO, and Vivo. These companies rely on advanced chips from TSMC for their flagship models. For example, Qualcomm’s Snapdragon 8 Elite Gen 5 and MediaTek’s Dimensity 9500, both built on TSMC’s 3nm process, are expected to see a 16% and 24% increase in production costs, respectively.
As a result, consumers in Southeast Asia may experience higher retail prices for upcoming flagship smartphones. This could also lead to longer wait times for discounts, fewer promotions, or the need to consider mid-range or older models for more budget-friendly options.
TSMC’s Strategic Position
TSMC’s decision to raise prices comes amid strong demand for advanced chips, particularly driven by the artificial intelligence (AI) sector. The company is also investing heavily in diversifying its manufacturing capabilities, including building new fabrication plants in the U.S., Japan, and Germany. However, these expansions come with increased costs, which are being reflected in the price hikes.
Final Thought
TSMC’s upcoming price increase is a strategic move to balance growing demand with rising production costs. While this may lead to higher smartphone prices in Southeast Asia, it also underscores the importance of advanced chip technology in driving innovation in the mobile industry. Consumers may need to adjust their expectations and consider alternative options as the market adapts to these changes.
