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
The more you buy, the more you save™
This is the wild wild west market, and the continuation of the crypto scam. If these cards won't be bought by the consumers, the AI gang will buy out them in a nick of time, even with much higher margins.
And yes. This is a job of the government, to put these mad dogs in place. This is obvious, how and where it all went, when the companies left "unattended". The market will not fix itself. It will serve only the greediest and most corrupt.
I agree though, that governments lack the supervision, or even go "in touch" with corporations. But the regulators, should definitelly widen their list of companies with anti-consumer behavior. This is time to finally make some order, in the mad rush.
So yeah I see why they would be fully onboard of raising prices.
With the way nvidia inflated they can easily bear the price increases but their competitors would be squeezed out, statements like this make them truly deserving of what's to come - they won't be able to sell generic gpu with no alternative forever, everyone who's serious about ai is developing their own npus which easily outperform nvidia's generic stuff.
There aren't a ton of high volume customers for 3nm precisely because of the already massively high costs.
2020, RTX 3080 - $700
2022, RTX 4080 - $1200
2024, RTX 5080 - $2040 <-You are here
2026, RTX 6080 - $3468
2028, RTX 7080 - $5896
2030, RTX 8080 - $10022
2032, RTX 9080 - $17038
2034, RTX 10080 - $28965
...
When RTX 4080 arrived with more than 50% price increase for 50% performance increase, we have heard from reviewers and company fanboys that this is OK, you don't have to buy the fastest and newest, it's obviously not a product for you if you're complaining...
This is just a logical continuation of an event that already happened.
As much as AMD is reported to not be competing in the high(est) end with RDNA4, if they punch around 4070TiS/4080/7900XT/XTX performance tier and are significantly more affordable, with reasonably compelling features and of course, a large VRAM pool, that will sway a lot of people. The issue they'd have there is if they are the obvious choice, they won't be able to make enough of them and the price will creep up becuase of demand, so I'm not holding my breath, they seem more content to launch at higher prices, and slowly lower capturing buyers willing to pay the going asking price as it moves.
We're at point where it's not worth it for nvidia to use silicon allocation on a big die for gamers when they can sell that big die at a much higher margin to enterprise. They might have a big 5090 chip for the lulz like the 4090, but they won't make many of them just like with the 4090 and then 5080 will be a half size chip, that's my bet.
I don't know what is AMD's plan, the computex video from gamers nexus with hardware unboxing hits it pretty well, they throw out a card that's not quite but almost competitive and price it like it's in the same level, receive bad press about the poor value of the card and proceed to discount it soon after. Why not launch it for cheaper from the start when this is consistently happening?
So I imagine there will be strong AI focus on these new generation cards - so much so they will even question if they are gaming cards, or predominantly strong home Neural Processing Units. Presentation will focus on AI capabilities, we'll see demonstration of stuff that won't be available in any useful way for years - kind of like the time they marketed ray tracing and DLSS with RTX 20x0, although the buyers of that generation saw very little of it implemented well during the time of that generation.
And prices will of course follow. Both RTX 5090 and even RTX 5080 will be in the new Titan territory, with skyrocketing price - but that will be OK, because they aren't rising the prices of gaming cards - these are tools to make living!
And just as Nvidia pushed DLSS 3 on RTX 40x0 cards exclusively without any big hardware change, we will see all the new AI features completely locked to new generation. New AI powered DLSS, AI NPCs, AI gaming assists, even AI audio processing features, all will use these "new" AI acceleration cores, so they will run on RTX 5070 but not on RTX 4090, Sorry.
Just sayin
2020, RTX 3080 - $700
2022, RTX 4080 - $1200
2024, RTX 5080 (RTX 4080 +5%)- $1500 <-You are here
2026, RTX 6080 (RTX 5080 +10%) - $1699
2028, RTX 7080 (RTX 6080 -2%) - $1649
2030, RTX 8080 (RTX 6080 +10%) - $1899
2032, RTX 9080 (RTX 8080 +12%)- $1999
2034, RTX 10080 (RTX 9080 +4%) - $2099 (end of story - nvidia goes bankrupt :clap::peace: )
And if all this somehow fails, guess what all those AI rigs and servers would be perfect for? You guessed it, crypto mining. We're a bit overdue for the next craze!
Look at AMD's own disappointing sales. Nvidia's are not better. So, what increased prices, excuse me, wth?