Introduction
In a significant move that could affect the pricing of Android flagships in 2025, Taiwan Semiconductor Manufacturing Company (TSMC) has announced a 4% increase in the prices of its N3 (3nm) and N4 (4nm) process nodes.
This price hike will have a ripple effect on smartphone manufacturers who rely on TSMC for cutting-edge chip production. Qualcomm and MediaTek, two of the biggest names in the mobile chip industry, use TSMC’s advanced processes to produce their latest flagship processors, such as the Snapdragon 8 Elite and Dimensity 9400.
The rise in production costs for these chips could lead to higher retail prices for premium Android devices in the coming year, making the next generation of smartphones more expensive for consumers. This development follows the announcement of price increases for the 3nm and 4nm nodes by TSMC, expected to impact key players in the mobile market, from Qualcomm’s Snapdragon chips to MediaTek’s Dimensity series.
Overview: Key Highlights
- TSMC’s Price Increase: Starting in 2025, TSMC will raise the prices for its 3nm and 4nm nodes by 4%.
- Impact on Chip Prices: Qualcomm’s Snapdragon 8 Elite and MediaTek’s Dimensity 9400, both built on TSMC’s 3nm node, will likely see higher production costs.
- Android Flagship Prices: The price hikes for advanced chips will likely result in higher retail prices for Android smartphones, particularly flagships.
- Rising Manufacturing Costs: The 4% price increase will be felt across the mobile industry, with Android brands such as Xiaomi, OPPO, and Vivo likely passing the costs to consumers.
- Samsung’s Struggles with 3nm: Samsung Foundry’s challenges with its own 3nm process could make it even more reliant on TSMC for flagship chip production.
TSMC’s Price Hike: Why It Matters for Android Smartphones
TSMC is a key supplier for some of the world’s most advanced mobile processors, including the Snapdragon 8 Elite and MediaTek’s Dimensity 9400. These chips are essential for delivering high-end performance in flagship Android smartphones.
However, with TSMC’s announcement of a 4% price hike on its N3 and N4 process nodes starting in 2025, the cost of producing these chips will increase.
This price increase comes as TSMC faces higher operational costs, particularly as it scales down to more advanced manufacturing nodes. The company has been at the forefront of semiconductor innovation, offering the most advanced process technology for mobile chips. Yet, developing these smaller, more efficient nodes involves complex and expensive manufacturing techniques. TSMC’s price adjustments reflect these challenges.
The impact of this price hike will be felt most acutely by companies like Qualcomm and MediaTek, which rely heavily on TSMC for their premium chipsets. As the cost of chip production rises, these companies will likely pass on the increased expenses to smartphone manufacturers.
Qualcomm’s Snapdragon 8 Elite and the 3nm Shift
Qualcomm’s Snapdragon 8 Elite, set to power many of the premium Android devices in 2025, is based on TSMC’s advanced 3nm process node. The 3nm technology offers significant performance and efficiency improvements over previous 4nm and 5nm nodes, making it ideal for flagship smartphones. However, as Qualcomm shifts to 3nm, the company faces a significant increase in production costs.
According to industry expert Ming-Chi Kuo, the cost of producing the Snapdragon 8 Elite has already risen by approximately 15%, reaching $180 per unit due to the transition to the 3nm node. This increase in production costs is already reflected in the higher prices of smartphones featuring the Snapdragon 8 Elite.
With TSMC’s upcoming 4% price hike, production costs for the Snapdragon 8 Elite will rise even further. This could translate into higher retail prices for Android smartphones that feature this chipset. As the premium segment of the smartphone market continues to evolve, it’s likely that consumers will face the brunt of these cost increases, as manufacturers may have little choice but to pass these extra costs along.
MediaTek’s Dimensity 9400: Another Casualty of the Price Hike
Similar to Qualcomm, MediaTek has also moved to TSMC’s 3nm process for its latest flagship SoC, the Dimensity 9400. While MediaTek has yet to disclose the exact cost of manufacturing the Dimensity 9400, it’s safe to assume that it too will face a price increase due to TSMC’s price hike.
MediaTek, traditionally known for offering more affordable options compared to Qualcomm, is gradually making a name for itself in the premium market.
The Dimensity 9400 is designed to compete with Qualcomm’s Snapdragon 8 Elite, offering competitive performance in flagship smartphones. However, with the rising costs of production, MediaTek’s strategy may be challenged.
If MediaTek’s chip production costs increase in line with TSMC’s price hike, the Dimensity 9400 could become more expensive to manufacture. As a result, MediaTek might have to adjust its pricing structure, which could further push up the retail prices of Android smartphones using the Dimensity 9400.
How Will Smartphone Manufacturers React?
As the cost of chips rises, smartphone manufacturers will be under pressure to adjust their pricing strategies. Brands such as Xiaomi, OPPO, Vivo, and Honor, which rely on Qualcomm and MediaTek chips, will have to navigate the higher production costs while maintaining their profit margins. This could lead to significant price hikes across the board, particularly for flagship models.
For instance, Vivo’s X200 series, OPPO’s Find X8 series, and Xiaomi’s 15 series have already experienced price increases for their latest models, with prices rising anywhere from $13 to $70. These increases directly tie to the rising chip production costs, pushing up overall smartphone manufacturing expenses.
If TSMC’s price hikes continue into 2026 and beyond, Android smartphone prices could climb higher. Manufacturers may need to find new ways to offset these costs, perhaps by reducing profit margins or implementing cost-saving measures in other production areas.
Samsung Foundry: The 3nm Struggles
While TSMC continues to lead the pack in advanced semiconductor manufacturing, Samsung Foundry has encountered challenges in producing chips at the 3nm node. Yield rates for Samsung’s 3nm process have been lower than expected, forcing the company to rely more heavily on TSMC for the production of high-end chips.
This reliance on TSMC further underscores the growing importance of TSMC’s 3nm node for the mobile industry. As Samsung looks to incorporate Qualcomm’s Snapdragon 8 Elite into its Galaxy S25 lineup, its dependence on TSMC’s 3nm process will only increase. If TSMC raises prices on these nodes, it could have a more significant impact on Samsung’s production costs, potentially leading to even higher prices for Galaxy smartphones.
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Consumer Impact: Will Higher Prices Affect the Market?
For consumers, the 4% price hike on TSMC 3nm and 4nm process nodes will likely result in higher prices for flagship Android smartphones.
In a market where flagship devices already command premium prices, even a modest price increase could have a noticeable effect on the overall cost of a smartphone.
As chip costs rise, smartphone manufacturers may have little choice but to pass these increased costs onto consumers. This could lead to higher price tags for upcoming devices from top Android brands like Samsung, Xiaomi, OPPO, and Vivo. For consumers, this may mean longer wait times for discounts, fewer promotions, or the need to consider mid-range or older models for more budget-friendly options.
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Conclusion
TSMC’s decision to increase prices for its 3nm and 4nm nodes by 4% in 2025 will undoubtedly impact the pricing of Android flagship smartphones.
With key players like Qualcomm and MediaTek reliant on TSMC’s cutting-edge technology, the price hikes will push up production costs, which could translate into higher retail prices for premium smartphones.
As smartphone manufacturers absorb these cost increases, consumers may face a higher price tag for the next generation of Android devices.
As the mobile industry adapts to these changes, it remains to be seen how brands will respond. Will they raise prices across the board, or will they find other ways to mitigate the increased production costs?
Only time will tell, but one thing is certain: 2025 could see a shift in the pricing landscape for Android smartphones.
