TSMC to Raise Mature Process Prices in January Amid AI Demand

TSMC is raising prices for its mature process nodes, a shift that will likely increase costs for hardware manufacturers producing GPUs, CPUs, and other chips not requiring the latest nanometer scales. This decision matters to buyers because it signals that demand for AI-related components is strong enough to drive up costs across the entire semiconductor supply chain, not just at the cutting edge. Manufacturers using these mature processes for mass-market devices may face reduced margins or increased product costs.

Price adjustments affect GPU and CPU manufacturers

The manufacturer sent notifications to its IC design firm partners outlining the proposed price adjustments for mature process technologies. These process nodes support diverse applications, including automotive chips and consumer electronics that do not require advanced lithography. The specific percentage of the increase will vary depending on the individual manufacturer and their specific product lines, meaning the impact will not be uniform across all chip types.

TSMC President Wei Cerui addressed the balance between profitability and customer relations during a recent shareholder meeting. He stated that making money is necessary, but partners remain partners, emphasizing a long-term strategic view over short-term profit maximization. This perspective reflects TSMC's strategy of balancing long-term partnerships with operational demands in a global market. The price hike follows a trend that began with the company's advanced nodes, extending the cost increases to a broader segment of its business.

The timeline for these changes is specific, with the final confirmation of price increases expected in the fourth quarter of 2024. The new rates will officially take effect in January 2025, giving manufacturers a window to adjust their supply chain contracts and product roadmaps. The phased implementation provides time for adjustment, confirming the upward pricing trend. The move is driven by surging AI computing demand, which is offsetting seasonal slumps in smartphone sales and filling production capacity.