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CPU, GPU prices could soar higher as silicon costs increase

Semiconductor manufacturer TSMC is reportedly increasing prices for its silicon, which means the cost of CPUs and GPUs will inevitably rise as well.

DigiTimes reports that processor prices are set to increase “substantially” in 2022 due to a boost in foundry costs. Specifically, processors based on the sub-7nm process nodes are expected to be more expensive moving forward.

A PC case showing the inside of the system, including the GPU and CPU.

TSMC has apparently applied a 10% to 20% price hike across its mature and advanced node ranges. As PCGamer notes, the company is said to be affected by several factors, including the ongoing chip shortages, freight and logistics, and material costs.

As pointed out by Tom’s Hardware, prices for products from technology giants such as AMD, Intel, and Nvidia will all be impacted. AMD, which utilizes TSMC’s aforementioned 7nm and 5nm transistors for its Zen 2-4 architecture, will inevitably be affected by the price increases. As such, expect Team Red CPUs to become more costly, including its highly anticipated Ryzen 7000 processors. Although the report omits any reference to AMD’s RDNA2 graphics cards, Tom’s Hardware highlights how these GPUs should become more expensive as well due to the cards being based on TSMC’s 7nm process.

As for Nvidia GPUs, the company has reportedly decided to no longer have Samsung as its preferred silicon partner. Instead, it has opted to switch to TSMC’s new 5nm process, which would be used for its upcoming RTX 40 series. DigiTimes added that the GPU firm has paid TSMC in the form of prepayments for long-term orders of 5nm silicon for future RTX 40 video cards.

Although Intel is said to be constructing new chip fab sites that will cost billions of dollars, Team Blue will also need to increase its payment amounts to TSMC in the interim. As Tom’s Hardware notes, some of its chips are already manufactured by TSMC.

Even Apple, one of TSMC’s largest customers, has reportedly agreed to the increased prices attached to TSMC’s silicon. The iPhone and Mac maker is reported to have ordered up to 150,000 4nm chips for its new CPU, the A16 processor.

TSMC itself will invest up to $44 billion in 2022 to meet higher demand levels for its nodes, which follows the record $30.4 billion it spent during 2021. The company did enjoy record sales last year.

Ultimately, these price hikes will see the already inflated price points of GPUs and CPUs rise even further in the near future. Amid a worldwide chip shortage and supply chain issues, we’ve seen the latest technology products, particularly GPUs, soar in costs. Scalpers, crypto miners, and eager gamers usually battle it out for the initial stock, after which the MSRP for such items at least doubles.

Although the powerful RTX 3090 Ti GPU’s leaked price tag of $4,500 shouldn’t be too much of a concern for the mainstream segment of the market, TSMC’s price increases will affect all ranges of GPUs. For general consumers, we can only hope that Intel’s expectation of a supply-demand balance for chips being achieved in 2023 comes to fruition so we can see price points finally normalize across the board.

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