Do you expect CPU and GPU prices to finally start falling in 2022? Think again buddy. We’re only a month away from 2022 and we’re already faced with the prospect of hardware prices from AMD, Nvidia, and Intel rising as the major chip foundry, TSMC, has raised its production quote for the year by more than half a month. 10-20%.
Of course, the knock-on effect will directly hit your pocket. If you’re saving for an already expensive GPU, you should go back to your savings account and keep filling.
TSMC Increases Manufacturing Quotations by up to 20%
As first reported by DigiTimes, Taiwanese semiconductor giant TSMC is raising prices, affecting hardware across the board. The rising costs of chipmakers themselves will add 10-20% to the premium for their 7nm and 5nm manufacturing processes, affecting AMD, Intel, and Nvidia hardware.
Interestingly, Apple wasn’t named in the original report, even though it does use TSMC for the hugely successful M1 chip and other custom silicon.
The price increase will affect hardware across the entire board. AMD uses TSMC to make its Zen 2 and Zen 3 processors, while TSMC will also produce the shiny new Zen 4 upgrade, set to launch this year. Furthermore, AMD’s RDNA 2-based 6000-series GPUs are also at stake, with the 7nm chips used in those graphics cards also under TSMC’s roof.
Nvidia’s next-generation RTX 40-series GPUs are also likely to hit the mark. While the report shows that Nvidia is already paying upfront for manufacturing space on TSMC’s 5nm process, the higher costs will inevitably pass to consumers at a time when GPU prices are already in the moat.
Intel will also feel the heat, although it has the least contact with TSMC. Intel has put a significant amount of its hardware production in-house but relies on TSMC for advanced fabrication processes like 5nm. However, there is still no indication as to how TSMC’s price increase will affect Intel’s Arc Alchemist graphics cards, but this is unlikely to be good news.
What does TSMC’s price drop mean for consumers?
Well, as alluded to in the introduction, if you were hoping to get cheap hardware in 2022, think again. New CPUs and GPUs are unlikely to drop in price anytime soon. According to the report, you could see a 20% increase in hardware costs.
Even if you don’t want to buy new hardware, the knockoff effect will hit the second-hand market. If people don’t upgrade to new hardware because of high prices, then second-hand goods will also increase in price as the market dries up.
Furthermore, if you read between the lines a bit, TSMC doesn’t worry about production capacity. It is direct production costs that have increased, pushing prices higher. These incredible-sounding Nvidia RTX 40-series GPUs will likely arrive on time and with considerable fanfare, but you might have to shell out a mortgage to get one.
So what does that mean for consumers in practical terms? According to Tom’s Hardware, the average price for an Nvidia GeForce RTX 3080 is $1,783 in December 2021. A full 20% increase above that price pushes the average to $2,139. Noisy. The slightly cheaper AMD Radeon RX 6800 XT has an average price of $1,387 through December 2021. The 20% increase pushes that number to $1,664. Again, ouch.
Will PC hardware prices drop?
The big question everyone asks is “When will PC hardware prices drop?”
At this point, there doesn’t seem to be a simple answer. Production delays, chip shortages, scaling, crypto mining, rising energy costs worldwide, shipping problems…consumers are faced with a substantial list of problems. the problem of forcing higher hardware prices.
All you can do now is hope that your current hardware holds up for as long as possible!