Key facts
- TSMC intends to increase prices for both advanced and mature chip production by up to 10% starting in 2027.
- The price hike is driven by rising costs for materials, manufacturing equipment, and the construction of new overseas chip plants.
- The devaluation of the Taiwan dollar against the US dollar is a key factor affecting TSMC's margins.
- Processes from 5nm generation onwards, including 4nm, 3nm, and 2nm, are expected to see price increases.
- TSMC is investing $165 billion in semiconductor plants in the US.
TSMC, the world's largest contract chip manufacturer, is planning to raise prices for its chipmaking services by up to 10% for both advanced and mature processes starting in 2027. This decision comes amid rising costs for materials, manufacturing equipment, and the construction of new overseas facilities, particularly in the United States and Japan. The company is also contending with the devaluation of the Taiwan dollar against the US dollar, which impacts its profit margins as major clients pay in USD.
Reports indicate that TSMC has begun negotiating new supply contracts, with price increases potentially taking effect as early as 2026. The affected processes are expected to include those from the 5-nanometer generation onwards, encompassing 4nm, 3nm, and 2nm technologies. TSMC's significant investments in overseas plants, totaling $165 billion in the US alone, are a key driver for the price adjustments.
Despite these planned increases, TSMC is experiencing robust demand, with its advanced chip processes operating at 100% utilization in the second quarter of 2025. The company holds a dominant market share of 70.2% in contract chip manufacturing, far ahead of competitors like Samsung. Some reports suggest that companies such as AMD, Nvidia, and Qualcomm are exploring alternatives, including chips from Samsung, potentially to diversify their supply chains.