Wafer prices expected to increase by 3-6% next year... 2·3 nano supply shortage continues
Samsung Electronics (005930) expands 2-nano orders… AI/HPC before securing new customers
TSMC, the world's largest foundry company, is increasing its 2-nano production capacity, but the supply shortage is not being resolved. As orders for advanced semiconductors for artificial intelligence (AI) and high-performance computing (HPC) increase, wafer prices are expected to rise further next year.
Samsung Electronics (005930) is also seeking to expand 2-nano orders. Following Tesla, the company has secured projects from major cloud service providers (CSPs) and AI/HPC customers, and TSMC's price increase and supply shortage are expected to affect the competition for new 2-nano orders.
Despite TSMC 2-nano production increase of 22%, supply is insufficient... price increase next year
Digitimes, a Taiwanese semiconductor media outlet, recently reported that TSMC plans to increase wafer shipment prices by process by 3-6% starting in January 2027, citing supply chain officials. It is reported that the increase in cutting-edge processes such as 2 and 3 nanometers is relatively large. TSMC did not specifically comment on its pricing policy.
Along with the price increase, production capacity is also rapidly increasing. According to Taiwan's Economic Daily, TSMC's monthly 2-nano production capacity is expected to increase by about 22% from 90,000 sheets at the end of this year to 110,000 sheets by the middle of next year. 3nm is also expected to expand from more than 180,000 sheets per month to 210,000 sheets during the same period. Taiwanese market research company TrendForce also reported this local report.
Nevertheless, it is reported that the supply of 2 and 3 nanometers cannot keep up with demand. Visibility for some orders has been secured until 2030, and processes below 45 nanometers are also maintaining high utilization rates. However, this does not mean that the entire production volume has already been exhausted by 2030.
TSMC previously said that its pricing strategy is “strategic, not opportunistic,” and that “we will work closely with our customers and provide services at a price that recognizes our value.”
Samsung 2-nano orders increase... Secure AI/HPC customers
Samsung Electronics is increasing its AI/HPC customers focusing on the 2-nano Gate All Around (GAA) process. Samsung Electronics expected 2-nano orders this year to increase by 130% compared to the previous year, and announced that 2-nano HPC design orders from major customers also increased in the second quarter.
The center of gravity of the foundry business is also shifting toward HPC. Noh Mi-jeong, managing director of Samsung Electronics' foundry division, said at a corporate briefing session on the 29th of last month, “We expect that by 2029, HPC customers will be the majority, and HPC will account for well over half of the sales structure.”
The share of HPC in Samsung's foundry business has increased from 5% in 2017 to 28% currently. Samsung Electronics plans to increase this to 66% by 2029. The number of customers has currently increased approximately three-fold compared to 2017 when the foundry division was launched, and the goal is to increase this to approximately four-fold by 2029.
New project rather than existing volume... Increasing competition for 2-nano orders
It is difficult for TSMC's price increase to immediately lead to the departure of existing customers. As cutting-edge semiconductors are developed from the design stage to suit a specific foundry process, additional design and verification are required to change the production site. Yield and mass production stability are equally important conditions as price.
On the 29th of last month, it was reported that Samsung Foundry's 2-nano (SF2) process yield was close to 60%, but this is not a figure officially disclosed by Samsung Electronics.
Samsung Electronics announced in its recent earnings announcement that it is pursuing yield stabilization and productivity improvement of the 2nd generation process based on its experience in mass production of the 2nd generation 2nm process. The first fab in Taylor, Texas, USA, is scheduled to begin initial operation at the end of this year.
Therefore, it is highly likely that immediate competition will first appear in newly ordered AI and HPC projects rather than in existing TSMC volumes. If the 2-nano project secured by Samsung Electronics leads to mass production and secures additional customers, it could also help improve foundry operation rate and profitability.
TSMC continues to have a 2-nano supply shortage despite increased production, and Samsung Electronics has entered a phase of increasing new customers. With the price increase next year, the competition between the two companies for orders for new 2-nano products is expected to become more intense.
