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Nvidia’s main chip maker is threatening to increase GPU prices

With Nvidia raking in money with its high-end AI GPUs, its chip-producer TSMC has hinted it could increase its silicon making prices.

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Nvidia has famously been skyrocketing in value recently, off the back of its specialist AI chips being snapped up in the tens of thousands with huge profit margins. That appears to have struck a nerve – or at least been noticed – with Nvidia’s main chip manufacturing partner, TSMC, hinting that it could increase its GPU production prices for Nvidia, so it can reap a little more of what Nvidia is sowing.

How this might affect future pricing of the best graphics cards is hard to say, as the implication here is that TSMC would be charging more for higher-profit items, rather than just charging more across the board. However, it does give us a little cause for concern, as if TSMC does raise its prices to produce gaming GPUs, we would reasonably expect Nvidia to pass on the price hike to consumers.

TSMC, or Taiwan Semiconductor Manufacturing Company, is the second largest silicon chip producer in the world, and one of just two companies that have recently produced the main GPU dies for Nvidia, along with Samsung. It holds a huge amount of sway in the tech community, as it also produces masses of chips for the likes of AMD, Apple, Intel, and more. It’s this sway that means it has the potential to push a little harder on Nvidia to extract a few extra dollars per chip.

This situation came to light after TSMC’s recent annual general meeting, where the company’s new chairman, C.C. Wei, spoke to local reporters and revealed that he “did complain to Nvidia’s CEO Jensen Huang – the ‘three trillion guy’ – that his products are so expensive… I think those products are really valuable for sure, but I am thinking about showing [him] our values as well.”

According to Nikkei Asia, Wei went on to point out that “anyone sitting at home can think [up this strategy],” which is indeed a quite reasonable statement. If most people or companies were in TSMC’s shoes, they’d have every reason to at least consider upping their prices.

For its part, Nvidia didn’t seem to be too concerned by these suggestions, with its CEO, Jensen Huang, saying to reporters, “I think TSMC, their contribution to the industry is really great, and raising prices… is consistent with the value they deliver. I’m very happy to see them succeed.”

Again, though, from Nvidia’s point of view, this may not be a concern as it could just raise prices to consumers and other business partners if the need arises. After all, at least on the gaming GPU front, the continued expectation that AMD isn’t going to compete hard with Nvidia at the high end of the market in the next generation, means Nvidia would be free to charge what it likes.

Here’s hoping Nvidia and TSMC both suddenly have a more generous turn of heart. Otherwise, all our hopes might be pinned on whatever the new Intel GPU can deliver.