Qualcomm and MediaTek Pay Up to 24% More to TSMC for Snapdragon 8 Elite Gen 5 and Dimensity 9500 Amid Rising Wafer Costs

The tech world is buzzing as Qualcomm and MediaTek prepare to unveil their latest processors, the Snapdragon 8 Elite Gen 5 and the Dimensity 9500, respectively. While much of the focus has been on their specifications and innovative features, the conversation has notably skirted around pricing. Recent reports reveal that TSMC, the semiconductor manufacturer vital to both companies, has not offered discounts on its advanced 3nm ‘N3P’ technology, resulting in significant costs for its clients.

MediaTek’s Higher Costs for TSMC’s 3nm ‘N3P’ Technology and Apple’s Possible Involvement

Although the 3nm manufacturing process presents limited enhancements—boasting merely a 5 percent increase in performance while maintaining the same power consumption and offering a 5-10 percent reduction in energy usage at consistent frequencies—reports from China Times suggest that both Qualcomm and MediaTek incurred higher costs to utilize TSMC’s new technology. Specific pricing details remain vague, but the premium each company paid has been noted.

According to the report, MediaTek is said to have incurred a 24 percent higher cost compared to its previous offerings, while Qualcomm’s increase was reported at 16 percent. However, details regarding whether these increases relate to their predecessors—namely, the Snapdragon 8 Elite and Dimensity 9400—are absent. Additionally, while the report references Apple’s A19 and A19 Pro chips, it provides no concrete figures concerning Apple’s transactions with TSMC.

Industry insiders point out that the cost of 3nm ‘N3P’ wafers has risen by 20 percent when compared to the older 3nm ‘N3E’ technology. This may imply that Apple, which uniquely integrates the A19 series in its devices, could shoulder these increased costs without the same pressures faced by its competitors. On the other hand, rivals in the smartphone sector may not enjoy the same luxury as they contend with higher pricing structures stemming from TSMC’s rising rates.

With increases of up to 24 percent ranging for TSMC’s wafers, it’s likely that Qualcomm and MediaTek’s premium costs will cascade down to their collaborators, potentially resulting in higher price tags for flagship devices launched this year. Furthermore, if the semiconductor landscape shows no signs of stabilizing, expectations indicate that TSMC’s forthcoming 2nm wafers might be 50 percent more expensive. Additionally, reports suggest that Apple has secured over half of the initial capacity for these upcoming chips, limiting availability for Qualcomm and MediaTek.

As we await the official announcements from Qualcomm and MediaTek, these financial dynamics could have significant implications for both manufacturers and their respective partners in a rapidly evolving market.

News Source: China Times

Source & Images