TSMC's 3-nanometer process pricing to increase 15% in the second half of the year and 5%-10% next year

According to the Taiwan Business Times, TSMC will again raise its 3-nanometer process quotes in the second half of the year, with a potential increase of up to 15%, and may further increase prices by 5% to 10% next year. Chairman Mark Liu will provide investors with a detailed explanation about the outlook for AI demand and overseas layout at the shareholder meeting on June 4th.

The 3-nanometer process has become a core strategic resource in the global semiconductor competition. With the simultaneous influx of demand for AI accelerators, customized ASICs, flagship smartphone chips, and high-performance computing, advanced process capacities continue to be fully loaded. The industry points out that the supply chain has fully entered a stage where "he who has capacity, rules the world".

The Logic Behind the Price Increase: It's More Than Just Supply and Demand Tension

ASIC manufacturers point out that this round of 3-nanometer price increases is not driven by urgent orders from a single customer, but rather a structural tension in the overall advanced process supply. In the past, the 3-nanometer process was mainly aimed at smartphone SoC, but with the full launch of AI server platforms, including cloud vendors such as Broadcom, AMD, Google, and AWS, have shifted chip designs to the 3-nanometer node, pushing up the demand for wafer input rapidly.

Market analysis suggests that advanced processes have shifted from purely technological competition to a game of capacity. Large cloud vendors have increased their investment in self-developed ASICs in recent years, reducing their reliance on high-end GPUs, but this has instead further expanded the demand for 3-nanometer capacity.

In addition, the establishment of overseas factories increases costs, and with the yield rate of 2-nanometer mass production still pending ramp-up, the market believes that TSMC's increase in 3-nanometer pricing has reasonable support. Institutional investors point out that 3-nanometer has become the most mature and stable mass production node for AI chips, and compared to the still early-stage 2-nanometer process, it offers a more cost-effective advantage to customers.

Capacity and Customer Queue Status

The supply chain reveals that TSMC's main 3-nanometer factory, Fab18, maintains high levels of operation, and the customer queue situation has not significantly eased. According to wafer input observations, the monthly capacity of 3-nanometer was about 130,000 wafers at the beginning of the year, and gradually increased to a level of 160,000 to 175,000 wafers in the second quarter. However, against the backdrop of continuous expansion in AI demand, the growth rate of capacity still struggles to match market growth.

MSCI Index Adjustments and Capital Market Catalysts

The latest semi-annual adjustment of the MSCI index took effect after the close on May 29th. TSMC has become the stock with the largest weight increase in the MSCI Taiwan Index, with the weight increased by 0.56 percentage points, reaching 58.33% after the adjustment. Foreign investors currently hold as much as 70.35% of TSMC, with a cumulative purchase of about 573,000 shares this year.

With the continuous inflow of passive funds, the market expects TSMC's stock price to gain momentum from a new wave of capital. It is reported that Morgan Stanley Securities will also invite TSMC to participate in investor explanation activities.