TSMC has recently indicated it will raise the production price for 2-nanometer wafer, the next-generation semiconductor process, by about 50% compared with the previous generation, prompting reported reluctance from major customers such as Qualcomm and MediaTek. Qualcomm, whose profitability has been hurting due to higher costs for TSMC's existing cutting-edge 3-nanometer chip contract manufacturing, may even consider dual-sourcing production to Samsung Electronics.
To make matters worse, TSMC's U.S. Arizona plant has reportedly experienced trial-and-error in staffing and equipment optimization, making it likely that production costs there will be higher than on Taiwan's main island, raising concerns that price negotiations with existing customers could be difficult. Analysts say this could also present an opportunity for Samsung Electronics' foundry division, which is aiming to rebound with 2-nanometer after setbacks with the 3-nanometer process.
Industry sources said on the 16th that TSMC's price increase for its existing state-of-the-art mobile chip process, 3-nanometer (N3P), is expected to lead to about a 16% price rise for Qualcomm's mobile application processor (AP). MediaTek, the world's No. 1 mobile chip maker, is also reported to face about a 24% increase in chip selling prices due to the rise in 3-nanometer costs. The explanation is that TSMC's price hikes have begun to directly affect the revenue of the two corporations, prompting them to show reluctance.
Recently, Qualcomm CEO Cristiano Amon made a pointed remark about TSMC's price-increase trend. While saying the company is keeping "as many options as possible" in mind regarding contract semiconductor manufacturing, he drew a line on Intel, which has recently attracted attention by succeeding in mass production of the 18A process, saying "at this point it is not an option."
Considering that among global contract semiconductor manufacturers only TSMC, Samsung Electronics, and Intel are capable of manufacturing sub-3-nanometer fine processes, Qualcomm's CEO remark can be interpreted to mean Samsung Electronics could be a second option. In fact, Samsung Electronics' foundry division is quietly competing with TSMC to win orders to produce Qualcomm's next-generation Snapdragon mobile APs.
TSMC's price-increase trend is likely to continue. Under the Trump administration's "Made in America" stance, TSMC is under pressure to produce locally in the U.S. and is hastening production at its Arizona plant, but it is reportedly struggling with local production optimization, including labor shortages.
The industry estimates that even production costs for the 4-nanometer process, two generations behind 2-nanometer, are at least 30% higher at TSMC's U.S. plants compared with Taiwan's main island. Sources say for 2-nanometer, where expensive equipment such as extreme ultraviolet (EUV) photolithography equipment is used and the production process is more complex, the difference could reach 50%. That means the production cost competitiveness in Taiwan, one of TSMC's key advantages, is likely to be eroded.
Samsung Electronics, which is establishing a foundry plant in Taylor, Texas, is also expected to face higher U.S. production costs than at Hwaseong and Pyeongtaek, but the prevailing assessment is that it has fewer risk factors than TSMC. A Samsung insider familiar with the company said, "Unlike TSMC, Samsung has operated a foundry plant in Texas for nearly 20 years, and it is ahead in equipment, personnel and production optimization due to collaboration systems with local companies such as GlobalFoundries, so it is in a favorable position for localization."