$Taiwan Semiconductor (TSM.US)$The company plans to implement substantial price hikes for its advanced packaging services, as the persistent strong demand for AI chips continues to exert upward pressure on capacity and pass it along to the supply chain's cost structure.
According to Taiwan's Industrial Times, citing supply-chain sources, Taiwan Semiconductor is considering raising the prices of its advanced packaging processes by 10% to 20%. If implemented, this move would directly drive up$NVIDIA (NVDA.US)$、$Advanced Micro Devices (AMD.US)$It will match the production costs of major chip manufacturers, while potentially driving them even higher.$Apple (AAPL.US)$The retail prices of the iPhone and MacBook—Apple products have already been under some pressure due to rising memory chip prices.
CoWoS demand has surged, and tight production capacity has triggered price hikes.
$Taiwan Semiconductor (TSM.US)$The core product slated for a price increase is the CoWoS (Chip on Wafer on Substrate) packaging technology.
This technology integrates the chip with high-bandwidth memory (HBM) within a single package, making it an indispensable key process for today's high-end AI accelerator chips.
According to the Industrial Times, in terms of capacity expansion, Taiwan Semiconductor is steadily ramping up its CoWoS production: monthly capacity is expected to exceed 130,000 wafers by 2026 and could further increase to over 200,000 wafers by 2027.
Cost pressures are being passed down the supply chain.
As the world's largest foundry,$Taiwan Semiconductor (TSM.US)$Its pricing decisions have a significant impact on the entire semiconductor supply chain. Its major customers include, in addition to NVIDIA and AMD, chip design giants such as Broadcom, Qualcomm, and MediaTek.
Rising packaging costs have an impact on$NVIDIA (NVDA.US)$The impact is particularly direct—NVIDIA's data-center GPUs are highly dependent on CoWoS packaging technology, and price hikes will squeeze their product gross margins or force downstream customers to shoulder higher procurement costs. For Apple, if packaging costs rise in tandem with the previously increased prices of memory chips, the cost pressures on its hardware products could intensify further.
The recent stock performance of Taiwan Semiconductor and NVIDIA has, to some extent, reflected market concerns about the sustainability of investment in the AI industry.
In addition to the news of rising packaging costs, SpaceX CEO Elon Musk had previously expressed a bearish outlook on the neocloud sector, which also weighed on several cloud computing and AI-related stocks this Monday.
Edited by melody