Because Intel struck back and NVidia managed to punch upwards by an entire node.
The moment TSMC can say "our node makes the king -- start bidding" their margins will expand exactly as you describe. They got close. Very close. Desperate, extreme action by the other players prevented them from fully capitalizing on the trophy. This time.
In truth, the 20% price ramp still reflects a partial victory.
NVidia is a customer of fab services, and it's customers, not nanometers, that decide which processes are competitive. Nobody would say Samsung 8nm was on equal quality footing to TSMC N7. NVidia, however, proved that they could ship products on Samsung 8 that successfully compete with products shipped on TSMC N7. That's what "punching up" means. It obviously wasn't easy, but it gives them leverage in the next round of negotiations with TSMC, because it proves that TSMC isn't an exclusive kingmaker. Not yet.
Yes, Intel did "strike back" -- they shipped competitive products and earned money. Like NVidia on Samsung 8nm, they had to punch up.
Once TSMC is a kingmaker, they will charge a king's ransom -- but they aren't. Not yet. Competitors are still holding on, though they certainly have the disadvantage at the moment. The 20% price hikes (which are actually more than 20%) reflect this dynamic almost exactly: TSMC is the champ, but not the undisputed champ, so they can start hiking prices but they can't actually squeeze out their customers' margins yet.
The moment TSMC can say "our node makes the king -- start bidding" their margins will expand exactly as you describe. They got close. Very close. Desperate, extreme action by the other players prevented them from fully capitalizing on the trophy. This time.
In truth, the 20% price ramp still reflects a partial victory.