TSMC Reportedly Plans Chip Price Hikes of Up to 10% by 2027

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's dominant contract chipmaker, plans to raise its chipmaking prices by up to 10% beginning in 2027, according to a report from Reuters citing two sources familiar with the matter. The move is intended to offset the escalating costs of materials, manufacturing equipment, and the construction of its overseas fabrication plants.

Scope of the Price Increase

The planned price adjustments will reportedly affect a wide range of the company's offerings, impacting both cutting-edge and legacy technologies. According to the sources, the increases will vary by customer and product.

• Advanced-node production: Chips manufactured on processes under 6-nanometers face increases of up to 10%.
• Mature-node production: Older technologies, including 12-nm, 16-nm, and 28-nm nodes, are also subject to price hikes of up to 10%.

Negotiations with clients reportedly concluded in July, with the new pricing structure set to take effect at the start of 2027, according to Nikkei Asia, which first reported the plan.

Company Context and Market Power

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When contacted by Reuters, a TSMC spokesperson stated that the company does not comment on pricing. However, the spokesperson added, "Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and sell our value to them."

The reported plan follows comments made in June by TSMC CEO C.C. Wei, who expressed a desire to raise prices while assuring that the company would avoid the kind of abrupt hikes seen in the memory chip sector. The move comes as TSMC enjoys a commanding market position, underscored by its recent record-breaking second-quarter profit of T$706.6 billion ($22 billion), a 77% year-over-year jump driven by soaring demand for AI chips.

Implications for the Tech Sector

A price increase from TSMC, a critical supplier for companies like Apple, Nvidia, and AMD, would have a significant ripple effect across the global technology supply chain. Higher foundry costs for chip designers could translate into increased prices for a vast array of consumer electronics, from smartphones and PCs to data center hardware. This development highlights the immense pricing power TSMC wields as the leading manufacturer of the world's most advanced semiconductors.