TSMC policies could make CPUs and GPUs more expensive

The cost always lands on the customers.

TSMC semiconductors - Image: TSMC
TSMC semiconductors - Image: TSMC

CEO of TSMC C.C. Wei has explained that some of its customers are going to have to pay more outside of the company’s native country of Taiwan meaning we could see CPUs and GPUs increase with their incoming respective new generations.

Announced in the Q1 TSMC earnings call, the company boasted profits of NT$ 592.64 billion (which translates to about $18.4bn) from the first three months of 2024. During the Q&A section of said call, Wei explained how customers wanting to use TSMC’s facilities outside of Taiwan would need to pay more to offset rising expenses, such as increased electricity costs, to meet the surging demand (via The Register).

“We do encounter some kind of higher cost in the overseas or even recently, the inflation, and the electricity,” says Wei. “We expect our customers to share some of the higher cost with us, and we already started our discussion with our customers.” Based on this information, we could see the likes of AMD and Nvidia graphics cards (both of which are currently made by TSMC) as well as the likes of Intel Core 14th Gen’s integrated Arc graphics and AMD Ryzen 7000, which uses TSMC’s 6nm process.

It’s a significant improvement over the earnings from this time last year as the Q1 2023 earnings translated to $16.7bn, which works out to be an increase of 10.1%. While this increase is a good sign of progress, beating expectations, it’s unsure whether the manufacturer can do enough to meet the increased demands given the rise of AI chipsets and incoming GPUs. The increased supply and demand means the costs may be passed onto its partners, and we, as customers, could feel the pinch.

TSMC is the largest producer of semiconductors and microprocessors in the world, and this bounceback effectively puts it in a position where it can set its own price. Given the fact that the demand will be on an unprecedented scale, charging the likes of Intel, AMD, and Nvidia more for their services isn’t entirely out of the equation. We’ll update you as the story develops; the worst-case scenario is a higher price tag for RTX 50 series and RDNA 4 GPUs.

Aleksha McLoughlin is an incredibly experienced hardware editor and writer. She's previously been the Hardware Editor for TechRadar Gaming, GamesRadar, PC Guide, and VideoGamer. She's also contributed hardware reviews and coverage for Dexerto, PC Gamer, Android Central, and Expert Reviews.