TSMC’s Reported 50% Price Hike for 2nm Chips Threatens to Drive Key Clients Like Qualcomm to Samsung

TradingKey - According to reports, global semiconductor foundry giant Taiwan Semiconductor Manufacturing Company (TSMC) plans to significantly increase prices for its upcoming 2-nanometer (2nm) chip manufacturing process, with potential hikes as high as 50%. This move could prompt some key customers to seek advanced process foundry services from its competitor Samsung Electronics.

The price surge isn't limited to the upcoming 2nm process. TSMC has already implemented price increases for its current 3-nanometer (N3) family of improved processes, with reportedly higher prices for N3E and N3P process technologies now reaching $25,000 and $27,000 per wafer, respectively.

Affected by the price hikes for the 3nm process, Qualcomm's mobile application processor manufacturing costs are expected to rise by approximately 16%, while MediaTek's chip manufacturing costs could increase by as much as 24%, significantly impacting the profitability of both companies.

Qualcomm CEO Cristiano Amon stated in September that the company would consider as many options as possible regarding semiconductor manufacturing, though he noted that Intel's 18A process is not yet trustworthy.

Considering that only TSMC, Samsung Electronics, and Intel compete in advanced processes below 3nm, Amon's comments may suggest Qualcomm is considering collaboration with Samsung Electronics on advanced processes.

This situation may provide Samsung Foundry with a potential opportunity to turn the tables. After setbacks with its 3nm process, Samsung is betting heavily on its 2nm process using Gate-All-Around (GAA) transistor technology, aiming to make a technological comeback and capture market share.

Reports indicate that Qualcomm has formed a joint team with Samsung to evaluate a 2nm GAA version of Snapdragon 8 Elite Gen 5 for use in Qualcomm's future flagship products.

However, Samsung still needs time to earn full market trust. Its historical reputation for poor yield control in advanced processes, along with past issues with heat and power management in Qualcomm chips it manufactured like the Snapdragon 888 and first-generation Snapdragon 8, remain significant concerns in customer decision-making.

Regardless of chip designers' choices, end consumers will inevitably bear the cost pressure.

If Qualcomm and MediaTek choose to continue with TSMC's expensive processes, the increased costs will almost certainly be passed on to end products, such as higher prices for next year's flagship smartphones. If they shift to Samsung, while potentially more cost-effective, chip experience could become a major issue, requiring consistently improved yields and performance stability to avoid repeating past mistakes that affected user experience.

TSMC's pricing trend is unlikely to reverse in the short term. Beyond the pricing power from technological leadership, the persistent influence of "Made in America" policies during the Trump administration has created significant pressure for TSMC to localize production in the United States, with the high-cost structure of its Arizona factory now an established reality.

Samsung, which is also building an advanced wafer fabrication plant in Taylor, Texas, is believed to face higher production costs than its domestic operations. However, analysts note that Samsung may have advantages over TSMC in localization aspects such as equipment, personnel, and production optimization, thanks to nearly 20 years of foundry operation experience in the U.S. (Austin factory) and partnerships with local players like GlobalFoundries.