Tuesday, June 18th 2024
TSMC Thinking to Raise Prices, NVIDIA's Jensen Fully Supports the Idea
NVIDIA's CEO Jensen Huang said on June 5th that TSMC's stock price is too low, and he agrees with new TSMC chairman C. C. Wei's idea about TSMC's value. Jensen promised to support TSMC in charging more for their wafers and a type of packaging called CoWoS. An article from TrendForce says that NVIDIA and TSMC will talk about chip prices for next year, which could help TSMC make more money. Jensen also said he's not too worried about problems between countries because Taiwan has a strong supply chain; TSMC is doing more than just making chips, they're handling many supply chain issues too.
Last year, many companies were waiting for TSMC's products, ever-increasing demand and production issues causing delays. Even though things got a bit better this year, there's still not enough supply. TSMC says that even making three times more 3-nanometer chips isn't enough, so they need to make even more. NVIDIA's profits are very high, much higher than other companies like AMD and even TSMC. If TSMC raises prices for these advanced processes, it won't hurt NVIDIA's profits much, but it might lower profits for other companies like Apple, AMD, and Qualcomm. It will also have an impact on end-users.
Updated on Jun 18
According to a report by Commercial Times, TSMC's 3 nm capacity is fully booked until 2026. TSMC plans to raise prices for its 3 nm chips by over 5%. It also plans to increase prices for advanced chip packaging by 10-20% next year. In addition to raising 3 nm chip prices, TSMC is also increasing production of advanced chip packaging like CoWoS due to increased demand. NVIDIA takes up about half of TSMC's packaging capacity and is expected to pay higher prices to secure more supply ahead of competitors.
Source:
TrendForce
Last year, many companies were waiting for TSMC's products, ever-increasing demand and production issues causing delays. Even though things got a bit better this year, there's still not enough supply. TSMC says that even making three times more 3-nanometer chips isn't enough, so they need to make even more. NVIDIA's profits are very high, much higher than other companies like AMD and even TSMC. If TSMC raises prices for these advanced processes, it won't hurt NVIDIA's profits much, but it might lower profits for other companies like Apple, AMD, and Qualcomm. It will also have an impact on end-users.
According to a report by Commercial Times, TSMC's 3 nm capacity is fully booked until 2026. TSMC plans to raise prices for its 3 nm chips by over 5%. It also plans to increase prices for advanced chip packaging by 10-20% next year. In addition to raising 3 nm chip prices, TSMC is also increasing production of advanced chip packaging like CoWoS due to increased demand. NVIDIA takes up about half of TSMC's packaging capacity and is expected to pay higher prices to secure more supply ahead of competitors.
72 Comments on TSMC Thinking to Raise Prices, NVIDIA's Jensen Fully Supports the Idea
If your profit is calculated as a percentage of the value of the product, it's clear that the more expensive this base is, the better. Nvidia won't complain.
PS: I hope Samsung is ready to take advantage of this.
But....
Apple has/had the "Reality Distortion Field", but Huang has the "Letha Distortion Field", which shields him from any & all comments/backlash when they raise their prices, which they will surely do when the chips start costing him more :D
And FYI, it's a feature that is built into all of his jackets, which we all pay for also....
For more reference, just refer to the comments posted by john above !
If it was just Nvidia, fine there would be Radeon or Arc. But since they all use TSMC increasing the prices there more than expected will cause all of them to be more expensive.
If nVIDIA can raise the price to the point where others would be less-likely to use it, it's a win for them on multiple levels.
I'm not trying to come across as any kind of brand loyalist (Like I always say: I own both a LG OLED [I got on close-out] and TCL LCD; that represents my sentiments), but I don't know how else to read this.
This is clearly attempting to price other companies out of using TSMC's best technologies for as long as possible, in-which he will pay for the next (advantage over competitors) and suggests TSMC allow this.
This not only stifles competition, but innovation.
Keeps nVIDIA's margins fat AF though, and the
public sentiment at the status-quohype machine rolling as nVIDIA as a tier-above with a 'premium' product worth much more than *their* cost...to some people.You have to understand; I respect Jensen's intelligence and ability to make money by any means necessary. You also have to understand: He is about as anti-consumer as you can possibly imagine.
Both things can be true...but I know in my heart what I find more important. Do others (even think about that)?
From experience, given this is not his first comment like this, many don't.
Most people do what they're told by the largest outlets (which are often granted perks, access, and kit)...listen carefully to *some* reviewers sometimes.
...and yes, this does include TPU taking
People listen to (insert media outlet) gush about their latest product; to many consumers their only interaction before purchase, and will pony up because they like/trust those
marketing mouth-piecespeople.People want those things (they generally often don't need); they want to be part of the 'cool-kid' club, even if it hurts them wrt value or lacks any rational explanation. It, or rather people, truly does/do work like this.
People also have incredibly short-term memories, if not the market/coverage constantly evolving to include people unfamiliar with the past.
Not to pick on DF (I appreciate/respect their minds/talents, and as individual people), but I'll never forget when the new version of FSR came out and they had to rush-ship an AMD card to one of their testers.
Too much to ask for such a well-regarded outlet to have an AMD card around to test literally ANYTHING, (or everything, like W1zard), rather than just preach the latest nVIDIA (tech) marketing stunt?
But that would put strain wrt their 'ins' at nVIDIA; because nVIDIA *would* hold that against them. Hence the conundrum. You want them, and they want to have that access (for good-intentioned reasons)...
But they shouldn't be come across as shills...yet still often do.
And then people buy things based on those type of (to some-extent existent realities with certainly less-updated and/or flattering coverage to the competition) situations.
There are so many different moving parts to nVIDIA's success that people just don't understand. I shouldn't make assumptions, but I'm not deaf/blind; these things *do often happen*.
This is why nVIDIA wins. You can respect it, but I can't support it. Not just because value/prices/margins, but consumerist morals.
So much of that company comes down to them making certain moves most don't think about but have a huge (positive) effect on public sentiment disproportional to their cost.
It drowns out the anti-consumer reality to most unless they pay close attention/remember/really get into the weeds.
It's something I've learned over the years: people don't generally play close attention, don't remember unless you remind them, and often don't like to research things for themselves.
As I've also said before, nVIDIA's anti-consumer tactics also often becomes a battle of attrition with their hope of them eventually being normalized (that nVIDIA thinks it can always win...and generally does).
I vote with my wallet as much as possible, but sooner or later you need it, and have no choice but to pay. If everyone buys less and less, maybe prices might go down, but I'm doubtful we'll ever see pre-covid prices again...............unfortunately.
Maybe AMD is going for cost here. Considering NV is happy with TSMC's increased prices and encourages it.
If people were smarter and valued their hard earn money more, there wouldn't be a market for those callous prices.
Just vote with your wallet and don't be stupid. Simple.
As for spending frivolous that’s different. But that’s the ADD generation……look at my new phone…..whatever. I’m using an old second hand iphone8. The old saying still applies….a fool and their money are soon parted.
The government isnt the solution to everything.