CPU and GPU prices set to increase amid TSMC wafer price hike

nanoguy

Posts: 981   +14
Staff member
In brief: The semiconductor industry can't keep up with demand for advanced chips even as foundries have continued to optimize their output. Now even that's off the table, so companies like TSMC are simply raising prices to make the most out of the current situation.

On Tuesday, Taiwan Economy Minister Wang Mei-Hua sought to reassure the US that chip shortages would ameliorate towards the end of the year as the Taiwanese government has been taking steps to increase the country's output. For a brief moment, industry watchers were actually optimistic about the possibility that supply could finally catch up with demand in the coming months.

However, a new report from Nikkei suggests the industry will have to brace for yet another blow, as TSMC has notified its clients that it will increase contract pricing by up to 20 percent, which is higher than any previous price hike. Taiwanese chipmakers collectively increased contract pricing by 10 percent over the past 12 months.

The good news is the price increases vary from client to client, so not all industries will see the same impact. For some of the notified clients, however, the price hike is immediate and will no doubt result in higher prices for end customers. Unfortunately for tech enthusiasts, this means that processors, GPUs, PC motherboards, phones, and consoles will see little improvement in availability but perhaps a substantial increase in their retail price.

Anything made using TSMC's 7nm and 5nm process nodes will cost up to 10 percent more per wafer, while chips made using 16nm and older process nodes will see higher price hikes.

Recently, other foundries have also increased prices for their clients, and that includes GlobalFoundries, United Microelectronics, Semiconductor Manufacturing International Corp., and Powerchip Semiconductor.

Last month, Samsung announced a similar price hike in order to finance new foundries and expansions on current production facilities. It wouldn't be surprising if there's a similar motivation behind TSMC's price hike, not to mention that improved margins can offset the costs and risks of pushing chip manufacturing equipment to the limit.

Otherwise, TSMC's decision to increase prices for its most advanced process nodes is grounded in more pressing realities, such as unrelenting demand for anything with a chip inside, the higher cost of raw materials, freight shipping costs, and keeping investors happy by making sure the gross margin doesn't fall under the industry standard, which is 50 percent.

Permalink to story.

 

Dimitriid

Posts: 1,136   +2,155
See you're saying they're "making the most out of the situation" and that's technically true, but I maintain they're intentionally creating the situation themselves by constraining supply: they knew well in advance how many customers they had coming in and Apple probably approached them at least a couple years before even starting producing their M1 line.

Yet by delaying their expansion of capacity and still crying about several hard-to-confirm issues they claim to have they are now getting what they wanted: A bidding war that's going to allow them to set the prices.

If we consider how few companies can even make processors and that are all simultaneously having the same issues well, we have a name for that and it's what I've been saying all this time: PRICE FIXING.
 

Dimitriid

Posts: 1,136   +2,155
Will just have to retire this hobby until **** gets better.
I'm not exactly "retiring" from the hobby, but my current plan is to downsize: The new APUs are available in decent numbers at least for the time being so I plan to run my primary rig as a Linux based APU only rig. I know I'm limited in what I can run but this is a good opportunity to just stop going through this rat race we call PC AAA gaming in general and just get into my backlog and smaller titles.

I still have a working 1070 on a Windows rig but I plan to basically turn that into a Windows based Shadowplay client and might switch the 1070 to something slightly beefier in a year or so if entry level GPUs are available (I think a 3050ti will more or less match the 1070 but with better power characteristics and newer features like DLSS so something like that)

But I am pretty much done trying to play the latest and greatest AAA releases: only thing that brings lately is massive disappointment anyway.
 

noel24

Posts: 753   +924
Well, good luck to Them, They are gonna need This when people run out of money, through This fake shortage.
Remember last year's PSU shortage? It was fake as f*ck, as now shops in My country are offering huge discounts on once unavailable Gold and Platinum 650W+ units, even 2018 models. Half the price of 2020. They are rotting on shelves. Bought Corsair Myself.
The same will soon happen with other PC components, as "master race" consumers will stop buying them amidst the GPU shortage. Manufacturers will feel the pinch, prices will fall, and within year or two everything will go to normal.
Otherwise, more traditionally PC gamers will move to consoles. Since 2013 GPU shortage, I've seen several of My friends converting to PS4/XO, for both price and convenience, replacing 2-4 year cycles of buying $1000 PC with 4-8 year cycle for console, plus annual subscription. I suppose It comes with age and children at home.
PCs will move to developing countries.
Thats how cigarettes, Formula 1 and FIFA video gaming series moved in the last 20 years.
Personally, My next GPU will be twice the performance of My RTX 2060 for the same money. Won't settle for less for more, lets scalpers choke.
Cheers, and stay strong for one more year.
 

Wereweeb

Posts: 65   +134
Yet by delaying their expansion of capacity and still crying about several hard-to-confirm issues they claim to have they are now getting what they wanted: A bidding war that's going to allow them to set the prices.

If we consider how few companies can even make processors and that are all simultaneously having the same issues well, we have a name for that and it's what I've been saying all this time: PRICE FIXING.

Welcome to capitalism. Competition in a risky business meant that the most financially conservative companies survived, while others failed and were bought out.

When there's a surplus of silicon, they cry about not enough demand and ask for tax cuts. When there's a shortage, they cry about not having enough foundries and demand money from nation-states to help them build capacity. Something something socialized losses, privatized profits.

Silicon foundries should be open-source and have a global board elected by consumers and engineers. Their expansion is already funded by the states they operate in anyways, and today silicon is more essential than water for the human race.
 

Shadowboxer

Posts: 1,717   +1,322
Itā€™s not an artificial shortage, I heard ground up 7nm wafers from TSMC, directly injected into the bloodstream can counter the 5G effect and cure you of covid.
 

kiwigraeme

Posts: 566   +430
Good on them - not only shipping costs - probably having to pay more for workers , water , covid compliance etc - as a consumer these things seem to even out - except where companies try to define a new normal - eg flagship phones( I' still pay $200 to $300 ) . Memory had crazy cycles .
After the Thailand floods, Japanese fire - Hard drives when through the roof - took a longtime to come down - TBF it has been offset by more reliability .
These are only a proportion of final products - those manufacturers will have other higher costs as well .
But as stated above PC game hardware sellers competing with Consoles - but doesn't end there . As competing with all human activities - ah screw this - I'll just buy that mountain bike/surf board , tabletop game
 

arrowflash

Posts: 474   +511
I'm not exactly "retiring" from the hobby, but my current plan is to downsize: The new APUs are available in decent numbers at least for the time being so I plan to run my primary rig as a Linux based APU only rig. I know I'm limited in what I can run but this is a good opportunity to just stop going through this rat race we call PC AAA gaming in general and just get into my backlog and smaller titles.

I still have a working 1070 on a Windows rig but I plan to basically turn that into a Windows based Shadowplay client and might switch the 1070 to something slightly beefier in a year or so if entry level GPUs are available (I think a 3050ti will more or less match the 1070 but with better power characteristics and newer features like DLSS so something like that)

But I am pretty much done trying to play the latest and greatest AAA releases: only thing that brings lately is massive disappointment anyway.

According to UserBenchmark, the laptop version of the 1070 has 30% better average performance than the laptop version of the 3050ti. The desktop 1070, 35%. (desktop 3050ti data isn't available yet). These pretty disappointing numbers show that a desktop 3050ti definitely won't match a desktop 1070, though the gap might be a little closer than the mobile version (I wouldn't expect anything better than 20%).

I have similar plans to yours. I'm happily gaming on a RTX 2060 Super @1080p, that only replaced my 1070 because the latter died. Not planning on upgrading gaming resolution unless there are significant performance increases while mantaining prices in the following years. With luck, my 2060 Super will survive long enough that when it fails, it can be replaced by a gaming APU or x50 series card with little to no performance loss. The Ryzen 7 5700G is already proving itself capable of running a few 3 - 5 year old AAA titles on low / medium settings at 1080p/60 fps, so things look promising for future APU generations.
 

arrowflash

Posts: 474   +511
Good on them - not only shipping costs - probably having to pay more for workers , water , covid compliance etc - as a consumer these things seem to even out - except where companies try to define a new normal - eg flagship phones( I' still pay $200 to $300 ) . Memory had crazy cycles .
After the Thailand floods, Japanese fire - Hard drives when through the roof - took a longtime to come down - TBF it has been offset by more reliability .
These are only a proportion of final products - those manufacturers will have other higher costs as well .
But as stated above PC game hardware sellers competing with Consoles - but doesn't end there . As competing with all human activities - ah screw this - I'll just buy that mountain bike/surf board , tabletop game

Hard drive prices last decade were a textbook example of taking advantage of a crisis to do some price fixing... after the dust (or waters in this case) had settled, prices took a lot longer than they should to come down.
 

jdwii

Posts: 18   +23
Starting to wonder if we will ever get back to normal when it comes to prices.

Starting to think anything under the 500$ market is basically dead
 

jdwii

Posts: 18   +23
Will just have to retire this hobby until **** gets better.


For the meantime I recommend just trying out new things on the PC like try out Linux and all the distros for fun and get into software and programming I know it sounds boring lol but hey what else is there to do with our PC hobbies in this terrible world.

Perhaps also try some older games way too many to name.
 

Theinsanegamer

Posts: 2,724   +4,259
Starting to wonder if we will ever get back to normal when it comes to prices.

Starting to think anything under the 500$ market is basically dead
Well what could one expect? You cant print half of ALL CASH in circulation in 18 months and not expect hyperinflation to come. Welcome to the 1970's stagflation, or worse, weimar germany.

And dont think consoles will be the gateway out. Expect them to be pushing $1000 next gen.
 

godrilla

Posts: 283   +143
Well what could one expect? You cant print half of ALL CASH in circulation in 18 months and not expect hyperinflation to come. Welcome to the 1970's stagflation, or worse, weimar germany.

And dont think consoles will be the gateway out. Expect them to be pushing $1000 next gen.
still cheaper than current scalped pricing. There is always GeForce experience and Stadia šŸ˜³.

Fyi anyone shopping for an Ampere card in the States, Bestbuy will have some stock 8/26.
 

pcnthuziast

Posts: 1,170   +897
At some point many people are quite literally going to have to give up the hobby as it will simply be too expensive and that could be a very good thing if it forces them to acknowledge there is more to life. Something a great many people are utterly blind to. Sadly.
 

godrilla

Posts: 283   +143
At some point many people are quite literally going to have to give up the hobby as it will simply be too expensive and that could be a very good thing if it forces them to acknowledge there is more to life. Something a great many people are utterly blind to. Sadly.
I predict since we are reaching a plateau in photorealism that eventually things will turnaround and it will be affordable again. I recall that both Epic and Nvidia CEO stated that eventually brute force will turn to more efficient coding in a plateau in itself and that hardware industry will turn to more efficient computing well at least regards to gaming. Imo things will eventually be affordable again but cryptomining delayed this by a decade hopefully sooner.
 

Kosmoz

Posts: 419   +750
Imagine the prices of the next gen GPUs in 2022.... maybe we get to $5k for top SKUs this next generation. I was thinking we will get there in 2 generations, but at this rate I think we can get there faster.

I can't wait to see fools with more money than sense pay $3k-$4k-$5k for a "gaming" GPU.
 

theruck

Posts: 382   +216
This. and new battery technology we read over and over again and nothing ever happens. the market dictates the prices, not the manufacturers
 

Kosmoz

Posts: 419   +750
I don't understand the need in paying that much for the whole "gaming" system. If I spent that much, it would be used to earn money. To be clear I said earn, not mine fake crypto.
I would say I don't understand either, but I would be lying.

They are spending that much because they were brainwashed by tech media and corporations (mainly nvidia) for over a dozen years now that they absolutely need the best of the best (which is laughably just marginally better than the good enough, like from 1440p to 4k and from 3080 to 3090) while paying double or triple for 5-10% more "something-something".

Soon they will have a new bait for those 8K screens and next gen GPUs that are 2x faster to actually run them, so you will see $5k GPUs paired $5k 8K screens, and that is without the rest of the system parts which if we are to make an new Alder Lake PC, the new i9 will be expensive, then DDR5 will be expensive and those new MB to support them, again expensive too.

So when - over $10k gaming PCs? In 2022? It can happen... I believe anything in this crazy world...