The cost of CPUs and GPUs could go up since TSMC recently reported a price increase in chip production.

TSMC Foundry

According to DigiTimes, the world’s largest foundry Taiwan Semiconductor Manufacturing Co. (TSMC), will increase its prices for chip production. Increased demand for semiconductors is currently leading to a price increase. The move will make TSMC more profitable but may also lead to higher prices for CPUs, GPUs, SoCs, and other PC components. Because of the extraordinary demand, other semiconductor manufacturers including Global Foundries, SMIC, PSMC, and UMC have all increased their production prices for chip production.

The cost of 7nm and thinner fabrication processes is expected to increase by up to 10%, and wafers’ manufacturing prices will go up by 20% with the 16nm and thicker nodes of TSMC. This might lead to a corresponding increase in the cost of end-user hardware in the future. The price of Apple products like iPhone, iPad, and Mac devices is unlikely to change because the company already sells them at a higher profit margin drastically.

For Intel, AMD, and Qualcomm, a 10% increase in the cost of chips will either hurt their profits or will force them to raise their prices. Intel will be using TSMC to manufacture its upcoming next-generation graphics processing unit ARC. Nvidia has already made it clear that the supply of its GPUs is continuing to be scarce next year.

The AMD APUs of Microsoft Xbox Series X/S and Sony PlayStation 5 are also manufactured by TSMC. Crypto miners will also be affected by this change as Bitmain (cryptocurrency mining machines manufacturer) might also increase prices for September sales for the next batch of Antminers delivered in the early or end of the third quarter of 2022.

The Problem is we do not have an alternative as chip-making giant TSMC makes close to 90 percent of the world’s most state-of-the-art chips, and as stated by TSMC executives, at least until 2023, the supply of TSMC wafers will be less than demand, and this will cause shortages. So it would be best if you considered whether you need to make a purchase sooner rather than later since later will not be as affordable as today.

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