Will taiwan semiconductor's outsourcing quote rise strongly again in 2025? Reports suggest that prices for 5 nanometers and below have risen by over 4%.

According to industry sources cited by the media, in order to reduce the impact of high overseas factory operating costs and the deployment costs for 2nm, taiwan semiconductor has recently released outsourcing quotes for 2025 to multiple customers. Depending on the customer, product, and capacity scale, the price increase for 5nm, 4nm, and 3nm processes is higher than the previously estimated 4%, reaching up to 10%. The outsourcing price for 2nm has even surged to 0.03 million US dollars.

From a platform perspective, the increase in business orders for HPC, including AI, is around 8-10%, while the increase in smart phone business orders is around 6%.

This year, taiwan semiconductor's outsourcing prices for processes below 7nm have increased by 3-6% compared to last year, while most processes above 16nm have remained stable.

The report also added that the outsourcing quote for the 2nm Baoshan factory, which is expected to officially start production in the fourth quarter of 2025, has been released, with a monthly capacity of 0.03 million pieces.

Media analysis suggests that taiwan semiconductor's continuous price hikes may be mainly due to its dominant position in the chip outsourcing sector and the possible erosion of its gross margin.

Currently, Samsung Electronics and Intel still face issues of lagging processes and low yields. Taiwan semiconductor stands alone in the chip outsourcing sector. With strong demand for AI and downstream chip manufacturers continuously competing for production capacity, taiwan semiconductor still holds significant pricing power.

Furthermore, considering factors such as the increasing production costs of overseas factory construction, the transfer and deployment costs of advanced processes, the comprehensive increase in electricity prices in Chinese Taiwan, and inflation, the media predicts that taiwan semiconductor may experience a 1% dilution in gross margin next year. This also provides a reason to support taiwan semiconductor's price increases to offset losses.

In addition, nvidia's previous order of SHRs (Super Hot Run, urgent orders) may have partially pushed up the OEM prices. At the end of last year, nvidia placed an order with taiwan semiconductor for the sale of artificial intelligence processors to china, with plans to start delivery in the first quarter of 2024.

However, the industry experts mentioned to the media that due to the slow recovery of the PC and smart phone markets, taiwan semiconductor continues to raise OEM quotes, posing significant challenges for customers.

Editor/ping