There’s some bad signs that gaming could get even more expensive in the future.
As reported on Tom’s Hardware, there’s a new rumor going around that chipmaker TSMC will be raising the prices of their chips. Their source on this is one Eric Jhonsa, an erstwhile investor who is serious enough in the business that he pays for Morgan Stanley reports.
Jhonsa said this on Twitter:
“Morgan Stanley (citing checks) says $TSM could hike leading-edge wafer prices across the board next year, rather than just for HPC clients such as $NVDA. Now sees wafer prices rising 5% on average next year and thinks CoWoS prices could rise 20% over the next 2 years.”
Jhonsa also included graphs indicating how TSMC has been slowly increasing the prices of their chips in recent years. But you’re probably asking, who is TSMC, and why should I care?
Founded in 1987, Taiwan Semiconductor Manufacturing Company is the world’s first dedicated semiconductor foundry, and the largest to this very day. To sum it up, they make chips for everyone who sells gadgets, whether that’s iPhones, autonomous cars, and of course, video game consoles.
We won’t get deep into the erudite details of making semiconductors, but what you do need to know is that there is a batting average for successfully making new generations of chips. You do not always see huge improvements in PC parts year on year, because sometimes they are successful in making them smaller, more efficient, and at greater volume, and sometimes they are not. There can be any number of reasons that they can fail to make good chips in a year, or two, such as the pandemic.
As shared on the GamingLeaksandRumours subreddit by user MetroidsSuffering, dataminers believe TSMC is making the chip for the Switch 2. It’s possible that Samsung could make the chip in their foundry, but they are not as experienced as TSMC is. So Samsung’s chips could be less powerful, or need more battery.
Nvidia, who is designing the Switch 2’s CPU for Nintendo, is one of TSMC’s biggest clients. The Morgan Stanley report claims that TSMC and Nvidia are negotiating on these higher prices, because of the higher costs of production.
This rumor is only about the Switch 2 for now, but it’s important to know that AMD is also a major TSMC client. It’s possible that the PlayStation 5, Xbox Series X|S, the Steam Deck, and every gaming portable using the Ryzen Z1 Extreme, will all be forced to raise their prices because of this.
The rumor can’t be definitively substantiated for now, but one can consider this as a warning to consumers of what could be coming to the industry’s immediate future.
