Silicon Wafers Finally Fall In Price But Does It Mean Cheaper CPUs And GPUs?

The spot price of 6-, 8-, and 12-inch silicon wafers has fallen for the first time in three years. Taiwanese business journal UDN notes that this is the first dip in wafer pricing since the start of the epidemic. These prepared silicon wafer blanks from businesses such as Global Wafers, Wafer Works and others are now facing an oversupply situation, precipitated by a deadly mix of ramping production and sliding demand. It is possible that this ‘raw material’ price cut to the foundries (TSMC, Intel, Samsung, etc.) might lead to price cuts at the consumer end but, as is typically the case, price drops will take time to filter through.

One of the major barriers to price cuts coming through to consumers is that the wafer producers have long-term contracts with their customers, which aren’t affected by fluctuations in the spot pricing until contracts get renegotiated. For some, that time may be several months away. Nevertheless, we may be seeing a trend established by the spot price declines, which will frame upcoming contract negotiations.

So, what of the scale of the spot price dips? Firstly, we must highlight that this is the first time in three years that this kind of price action has been observed. Secondly, the declines we are seeing in wafer prices now aren’t very sharp, but it might be a significant event to someone who pores over charts looking for trends. According to the source report, the smaller wafers have seen the strongest price declines; 6-inch (150mm) wafers are down in price by a single digit percentage in the latest quarter, 8-inch (200mm) wafer pricing have dropped slightly, but 12-inch (300mm) wafer pricing remains relatively stable.