TSMC Reportedly Auctioned off "Excess Capacity" at a 15-20% Price Premium

[Purgatory]

TSMC Reportedly Auctioned off "Excess Capacity" at a 15-20% Price Premium
by Raevenlord Today, 18:34
We've all been reading multiple stories covering the current overly high demand compared to manufacturing capability for semiconductors. Some of us have actually felt this lack in supply not only in our pockets (for those who purchased above-MSRP graphics cards, CPUs or consoles). And apparently, TSMC has just made quite a deal more money out of this "extraordinary demand" than it usually does, as it's being reported the company has auctioned off "excess capacity" to an unknown third-party for 15-20% higher prices than they usually practice.

Now before we start lynching TSMC here, that can mean many things. There is a backlog of orders still to be filled for most manufacturers, that much the reports doing the rounds claim; however, the nature of semiconductor manufacturing occurs throughout many different nodes and technologies. It's more than likely that this doesn't mean that TSMC saved some wafers that could have been used for AMD's RX, Zen, or custom APUs for next-gen consoles on the side and decided to give them to another buyer. This likely means that TSMC had one or more nodes or manufacturing technologies that hadn't been pre-booked yet, and that some players might've looked at that as a solution to their semiconductor woes. And TSMC, having more than one interested party, auctioned the excess capacity. The rumor places the most likely candidates for the purchase as car manufacturers, who have also been hard by the lack of semiconductors in the market, and that's one business where it may make sense to order manufacturing on nodes other than the most cutting-edge; cars just don't need the latest, most powerful and greatest chips to run their software. But all in all, the result is this: a good day for TSMC.



I'm guessing it's Apple that paid that but who knows, maybe even Intel to get back in the CPU race on some SKUS. Who ever it was expect a price hike on their products. But depends what nodes they have freed up and sold, maybe older nodes (20,28,14nm) and not the 7nm. So could be just a desperate company that needed older nodes for their tech production.

 

[GloriousMess]

Of all the entities in the supply chain I'm happy that TSMC are able to take advantage. They're the ones working flat out to service as many orders and manufacturers as possible, so it seems fair that they can profit from it.

I'd like to think that their profits would be reinvested into new fab facilities but honestly, if they just paid their workers more, I'd be ok with that.

Oh and you're probably right about the car manufacturers being the high bidder. It might also be AMD looking to increase the supply of consoles, given that the contracts with Sony and Microsoft probably don't allow for much leeway in pricing or supply fluctuations.

 

[Tute]

I still don't understand why the RTX2000 and RX500 series were discontinued so early. I mean that's 14/12nm node capacity that could have been used to make GPUs.

 

[Dontrocktheboat]

That has to be intel or apple, they got deep pockets.

Cant see AMD or Nvidia paying extra.

 

[Lightnix]

I still don't understand why the RTX2000 and RX500 series were discontinued so early. I mean that's 14/12nm node capacity that could have been used to make GPUs.

My understanding is Nvidia and AMD have deliberately tried to stop the flow of older cards that historically got sold at a discount during new product launches so they're turning off the taps earlier than they used to. It's just this generation it's really bitten them on the backside when they could be selling even more units than they currently are if they'd produced more of the last gen. But since they don't have a crystal ball, they couldn't easily have anticipated these market conditions.

But the other thing is I think often they upgrade a lot of the existing facilities rather than creating totally new capacity when they introduce a new node so the capacity of the old node gets consumed by the creation of the new node. But they keep some capacity of the old nodes around to satisfy certain business cases.

Then the other thing is it seems like Nvidia are using that remaining capacity on the old manufacturing node. They've apparently reintroduced the 2060, 2060 Super and 1050 Ti and are making mining cards using older parts, too. But this was broadly reactive to the current market conditions and it takes time for those efforts to become visible.

 

[Grim5]

I still don't understand why the RTX2000 and RX500 series were discontinued so early. I mean that's 14/12nm node capacity that could have been used to make GPUs.

It's worse for amd cause they still have no replacement for the 570 and 580

 

[KompuKare]

15% to 20% on top of what though?
Wafer prices are mostly secret as we seem to have more info on defect rates to plug into wafer yield calculators than the actual price of wafers at the various nodes.
A guess is that 7nm is around $10,000 per wafer which makes Zen 3 pretty cheap (about $16 but sells for over $ 300 for the full die) to make but equally means the console are barely worthwhile in comparison (wafer cost of the XBX die is around $100 and there's no way Microsoft pay nearly 20 times that).
5nm might be closer to $15,000 per wafer.

 

[Grim5]

15% to 20% on top of what though?
Wafer prices are mostly secret as we seem to have more info on defect rates to plug into wafer yield calculators than the actual price of wafers at the various nodes.
A guess is that 7nm is around $10,000 per wafer which makes Zen 3 pretty cheap (about $16 but sells for over $ 300 for the full die) to make but equally means the console are barely worthwhile in comparison (wafer cost of the XBX die is around $100 and there's no way Microsoft pay nearly 20 times that).
5nm might be closer to $15,000 per wafer.

Isnt 7nm $13k and that's last years price before tsmc increased them. 5nm is like $20k and $30k for 3nm (but again these numbers are from before tsmc announced a price increase for this year)