Is TSMC causing your GPU prices to go up?

Subject: Graphics Cards | February 26, 2010 - 02:15 PM |
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Much has been said about the problems that TSMC, the foundry partner to both ATI and NVIDIA, has had with its transition to 40nm technology.  When the Radeon HD 5870 graphics card and the rest of AMD's Evergreen family of GPUs first hit the market back in early October there were quite a few notable periods of shortages of the the cards.  Shortages obviously feed on the demand to raise prices and as we saw for the first two months of the 5000-series availability, prices where higher than the estimated pricing originally fed from AMD's marketing team.


Since then, we have heard via multiple stories that TSMC had corrected the processing technology problems and was up to full production speed.  Well a report out of Digitimes today is saying quite the contrary:

The current shortage of graphics chips, which is being caused largely by low yields of the 40nm process at Taiwan Semiconductor Manufacturing Company (TSMC), is unlikely to be completely solved before May, according to sources from graphics card makers.



Although TSMC recently said the defect density of its 40nm technology has already dropped from 0.3-0.4 per square inch to 0.1-0.3, the sources pointed out that the improvement in overall yield still needs more time before catching up with market demand.

This is definitely bad news for both AMD and NVIDIA but NVIDIA might get hit the hardest of all.  The upcoming Fermi-based GF100 graphics cards (now known as the GeForce GTX 480 and GTX 470) are rumored to be running very hot with already lower-than-hoped yields.  Continued problems on the manufacturing side will only complicate things more dramatically for NVIDIA as they attempt to play catch up with the Radeon HD 5000-series of cards that will enjoy as much as a 6-month production and sales lead. 



AMD Cypress GPU built
on TSMC's 40nm process technology

Why is this bad for our readers and consumers?  All three major Taiwanese graphics card vendors - ASUS, MSI and Gigabyte - are reportedly mulling a 5-10% price increase on their cards in order to compensate for the decline in GPU availability and increase in memory cost.  Users looking to get a late winter or early spring system upgrade might be met with higher than expected prices. 

Also relevant to the discussion is the rumored high pricing of NVIDIA's upcoming GF100 cards.  Initial preorders of the cards that tipped up this week listed the high-end GTX 480 going for $679 while the slightly slower GTX 470 was going for $499.  NVIDIA put out a statement today though disputing the price listings:

NVIDIA and our launch partners have not released pricing or pre-order information yet.  Any Web sites claiming to be taking pre-orders should not be considered legitimate.

Not exactly a denial but it should prevent anyone from actually placing one of those preorders for fear of getting completely ripped off. 

As a comparison, the high-end single GPU offering from AMD, the Radeon HD 5870, sells for about $399 so that would mean NVIDIA's upcoming card would need a dramatic increase in performance or feature set to justify such a price separation.  We'll have more details on whether or not they can pull that off on March 26th...



NVIDIA's Tom Petersen

One thing is for sure - neither our readers nor AMD or NVIDIA like to see costs go up on graphics cards and it is possible that one potential result from all of this TSMC transition fallout would be a shift in foundry companies.  The recently split-off GlobalFoundries would love nothing more than to bring both ATI's and NVIDIA's GPUs into the fold.

June 8, 2012 | 12:33 AM - Posted by seo website (not verified)

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