A new report indicates that Taiwan Semiconductor Manufacturing Company (TSMC) has significantly increased the price of its latest 3nm manufacturing process. This move is likely to lead to higher prices for next-generation flagship smartphones from all major brands, except possibly Apple.
The price hike comes as chip designers Qualcomm and MediaTek prepare to launch their newest flagship processors, the Snapdragon 8 Elite Gen 5 and the Dimensity 9500, both built on TSMC’s cutting-edge N3P node.
Up to 24% Price Increase
According to a report from China Times, the cost of wafers using TSMC’s N3P (3nm) technology has increased by approximately 20% compared to the previous-generation N3E process. This baseline increase has trickled down to chip designers in varying degrees:
- MediaTek is reportedly paying a 24% higher price for the Dimensity 9500.
- Qualcomm is facing a 16% increase for the Snapdragon 8 Elite Gen 5.
The report did not specify pricing for Apple, which uses the same N3P node for its A19 and A19 Pro chips. However, industry analysts suggest that as TSMC’s largest and most important customer, Apple may have secured a more favorable deal, insulating it from the full impact of the hike.
Why the Increase?
TSMC’s price increases are driven by the immense research, development, and capital expenditure required to stay at the forefront of semiconductor technology. Each successive node shrink (e.g., from 5nm to 3nm to 2nm) becomes exponentially more complex and expensive. The N3P node offers modest improvements, around a 5% performance gain at the same power, but comes at a premium cost.
More Expensive Phones
Chipmakers like Qualcomm and MediaTek are unlikely to absorb these increased costs. Instead, they are expected to pass them on to smartphone manufacturers such as Samsung, Xiaomi, Vivo, and Oppo. These brands, in turn, will have little choice but to raise the prices of their upcoming flagship devices to maintain profit margins.
This means consumers looking to buy high-end Android phones in the coming months should brace for potentially higher price tags.
The 2nm Era
The situation is projected to worsen with the next technological leap. TSMC’s 2nm (N2) process, slated for mass production in late 2026, is rumored to see a staggering 50% price increase. With Apple already said to have secured over half of the initial 2nm capacity, competitors may face both extreme costs and limited supply, further squeezing the flagship smartphone market.
The Conclusion
TSMC’s pricing power highlights its dominant position in the global tech supply chain. While driving innovation forward, the rising cost of advanced chipmaking is creating a tiered market where only the most prominent players can compete comfortably. For consumers, the golden era of rapid performance gains without significant price increases may be coming to an end, making today’s high-end phones look like relative bargains.
