If you wish to know why graphics playing cards are nonetheless so painfully expensive, you may want to check out TSMC's record-high earnings that are heading for $50 billion this yr
Nick discovered some fairly good post-Prime Day costs on GPUs earlier at this time. However solely comparatively talking. You are still over $700 for a ’70 Ti-class Nvidia card. Ouch. And one of many explanation why is unquestionably the dominance of TSMC in relation to manufacturing chips for the likes of Nvidia, AMD and, latterly, Intel. Which is why the corporate’s newest report earnings announcement issues.
TSMC has simply reported its figures for the second quarter of 2025, and the result’s a whopping $13.53 billion in revenue. Sure, revenue. TSMC’s revenues for the interval have been over $31 billion. These are some margins.
For context, AMD’s most up-to-date figures confirmed $709 million from revenues of $7.4 billion. So, AMD’s earnings are about 1/tenth of its revenues. TSMC’s are higher than one-third. Because it occurs, Nvidia’s newest figures present an nearly an identical ratio of income to revenue as TSMC, with $44 billion of income and just below $19 billion in revenue. Ker-ching!
TSMC made round $11 billion revenue within the first quarter of this yr. So, if it carries on like this, the corporate will hit round $50 billion in revenue in 2025.
After all, the easy indisputable fact that TSMC, or Nvidia for that matter, is making pots of money would not straight clarify why PC graphics playing cards are so expensive, particularly since TSMC attributes its flush fortunes to the AI increase. However one different aspect would possibly.
Funding financial institution Morgan Stanley publishes estimates of TSMC’s wafer costs, which 3DCenter collates right here. Wafers, in fact, are the shiny discs onto which pc chips are etched utilizing impossibly complicated lithography machines.
Morgan Stanley reckons TSMC’s present N3 wafers price about $25,000 a pop. That compares with $15,000 for an N5 wafer price in 2023 and 2024, which is actually the know-how Nvidia and AMD use for his or her present GPUs.
The price of N5 is claimed to have elevated a bit this yr to about $20,000. However here is the actually scary bit. Morgan Stanley thinks the going worth for TSMC’s N2 node, which is simply coming on-line now and is predicted to debut in Apple’s subsequent iPhone in September, is round $30,000.
Now, you would possibly anticipate AMD and Nvidia to not leapfrog N3 for his or her subsequent chips and go straight to that uber-pricey N2 node. However N3 continues to be dearer than N5.
After all, N3 is extra dense than N5, so you may nonetheless in all probability get extra transistors per greenback going for the brand new node. However then you definitely’d hope that the following RTX ’70 collection GPU, let’s name it the RTX 6070, may have fairly just a few extra transistors than the present RTX 5070.
Anyway, wafer costs going up is hardly a very good factor for precise graphics card costs. And TSMC making bumper earnings alongside Nvidia is not all that encouraging, both. Oh nicely!
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