The semiconductor industry has witnessed a dramatic surge in manufacturing costs, with Taiwan Semiconductor Manufacturing Company (TSMC) now charging $18,000 for a single 3-nanometer wafer - more than triple the price from a decade ago.
According to Ben Bajarin, CEO of Creative Strategies, the price escalation traces back to 2013, when a 28nm wafer cost approximately $5,000. This steep rise reflects the increasing complexity of chip production at smaller nodes.
The price hike directly impacts major tech companies like Apple, whose latest A-series processors use TSMC's advanced 3nm technology. While these chips pack impressive capabilities - with the A18 Pro containing 20 billion transistors compared to the A7's 1 billion in 2013 - the manufacturing costs have grown substantially.
The cost per square millimeter has jumped from $0.07 to $0.25, putting pressure on chip designers and device manufacturers. This increase stems from the technical challenges of producing at ever-smaller scales, where achieving good yields becomes increasingly difficult.
Despite higher prices, TSMC maintains certain protections for its customers. The company sets yield targets and may offer compensation or discounts if actual production falls significantly below expectations. Apple, as an early adopter of new processes, benefits from unique arrangements, including rumored per-chip pricing rather than the standard per-wafer model.
The rising costs reflect broader industry trends, where each new manufacturing node brings diminishing returns in density improvements while requiring more sophisticated and expensive production equipment. This pattern suggests semiconductor prices may continue their upward trajectory as technology advances.