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Wafer prices for Taiwan's TSMC ramp up 22% over year

Increase helps Taiwan Semiconductor Manufacturing Co maintain profits despite fewer shipments

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TSMC chip wafer. (Taiwan Semiconductor Manufacturing Company photo)

TSMC chip wafer. (Taiwan Semiconductor Manufacturing Company photo)

TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) wafer prices have leaped in price by 22% in a single year, according to a senior financial analyst.

The Taipei-based former journalist Dan Nystedt said in an X post earlier this week that the average selling price of the company’s finished 12-inch wafer had increased to NT$207,113 (US$6,611) in the fourth quarter. This represents an upturn of 22% over the previous year.

Nystedt said the rise was due to TSMC ramping up 3nm chip production. He also pointed out that the price gain compensated for a big drop in shipments.

In a graph showing TSMC wafer prices since 2018 prices are shown climbing steadily over the years. However, there is a slump in 2020 before a surge in 2023.

Wafer prices for Taiwan's TSMC ramp up 22% over year
(X, Dan Nystedt image)

“Certainly, lower priced nodes were hit hardest during the downturn, so fewer cheap wafers went out,” Nystedt commented. “But the Q4 2023 wafer ASP (average selling price) shows the advantage TSMC gains from leading-edge nodes. Fourth quarter revenue was US$19.55 billion, down only slightly from US$19.93 billion in Q4 2022.”

Elsewhere, Tom's Hardware said that TSMC’s advanced N7, N5, and N3 nodes comprised 67% of its wafer revenue. “Newer process node technologies are becoming much more expensive over time,” the online tech news portal commented, meaning growth comes from more expensive products rather than greater volume.

Wafers are the semiconductor material used to fabricate integrated circuits and are typically round slices made of germanium or silicon.