AMD is preparing for a series of price hikes in response to rising costs of acquiring silicon from its supply chain. According to Channel Gate, AMD is working on a 10% price increase across its products due to the upstream supply chain squeeze. Since most of AMD's silicon is manufactured by Taiwanese semiconductor giant TSMC, any change in wafer pricing forces AMD to pass these costs onto customers.

Reportedly, TSMC is increasing the pricing of its silicon wafers, and as a result, AMD must raise its product costs to maintain margins and keep the business afloat. The price increases will affect almost every product AMD offers, including GPUs, possibly CPUs, and even motherboard chipsets. For CPUs and GPUs, AMD has already implemented price hikes in the past, driven by a combination of demand and high DRAM pricing.

However, this is one of the first instances where AMD is increasing the pricing of its motherboard chipsets, which will require motherboard makers to adjust their pricing accordingly. If TSMC implements a 10% price hike across its nodes, from 2 nm N2 to some older mature nodes, AMD will have to pass these costs onto partners and consumers, who will ultimately bear the difference. As a fabless chip designer, AMD cannot dictate or negotiate for lower rates for wafers from TSMC.

For the Taiwanese silicon giant, the supply chain has been forcing the company to adjust its wafer pricing, especially as raw material costs have risen significantly under geopolitical pressure. Customers like AMD usually secure a specific number of wafers per month on some node and pay TSMC whatever the company demands, as no reliable alternative exists for now. The report notes that in Q4, AMD will implement some new policies, but it is unclear what that means at this time.

It likely refers to pricing implementation and how pricing changes are communicated, but that remains to be determined.