Rising Costs: TSMC’s 3nm Price Increase Signals Industry Trend

An increasing number of clients are following Apple’s lead by placing substantial orders at TSMC’s 3nm process node. Currently, the capacity allocated for major customers such as Apple and NVIDIA has been fully reserved, with orders expected to extend into 2026. Rumors suggest that TSMC intends to raise prices for advanced processes and advanced packaging, with the 3nm process and CoWoS packaging clearly at the forefront.

According to CTEE reports, TSMC plans to increase the price of 3nm orders by over 5%, and additionally, the prices for advanced packaging in 2025 will see an increase of 10% to 20%.

TSMC’s 3nm process node offers various technologies, including N3, N3E, N3P, N3X, and N3A. As 3nm process technology continues to advance, the forthcoming N3E will target AI accelerators, high-end smartphones, and data centers. N3P is scheduled for mass production in the second half of this year and is expected to become mainstream for mobile devices, consumer products, base stations, and network applications by 2026. N3X and N3A are tailored for high-performance computing and automotive clients.

Currently, TSMC operates five advanced packaging and testing facilities located in Hsinchu, Central Taiwan Science Park, Southern Taiwan Science Park, Longtan, and Zhunan. Among them, Zhunan’s AP6 was officially inaugurated in June 2023 as TSMC’s first fully automated factory to achieve 3D Fabric integration from front-end to back-end processes and testing. After a year of operation, AP6 has become the largest CoWoS packaging base in Taiwan, with its monthly capacity expected to double in the third quarter of this year, increasing from 17,000 to 33,000 wafers.

Industry insiders indicate that although AI accelerators do not currently use the most advanced processes, these products heavily rely on advanced packaging technology, making their ultimate market penetration dependent on TSMC’s advanced packaging capacity. At present, NVIDIA is TSMC’s largest customer for advanced packaging, accounting for about half of the orders, followed closely by AMD. NVIDIA has agreed to TSMC’s price increases to secure more advanced packaging capabilities and maintain an edge over competitors.

Moreover, with the increasing volume of orders, TSMC also plans to adjust the pricing for 5nm orders in the near future.