Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and a critical supplier to leading technology companies including Apple, NVIDIA, AMD and Qualcomm, is planning to increase chip manufacturing prices by up to 10% from 2027, according to people familiar with the matter.
The proposed price revision comes as the semiconductor giant faces rising costs related to raw materials, advanced manufacturing equipment and the construction of new fabrication plants across multiple countries.
According to sources, the price hikes will vary depending on the customer and the manufacturing technology being used, with increases reaching up to 10% across both mature and advanced semiconductor process nodes.
Both Legacy and Advanced Chips to Become Costlier
The planned revision is expected to affect a broad range of semiconductor manufacturing services.
Sources said mature process technologies, including 12-nanometre (nm), 16nm and 28nm nodes, could see price increases of up to 10%.
Meanwhile, advanced manufacturing processes below 6nm, which are widely used for high-performance AI processors, flagship smartphone chips and next-generation data centre processors, are also expected to witness increases of up to 10%.
The broad-based pricing strategy reflects TSMC’s confidence in sustained demand across both traditional semiconductor applications and the rapidly expanding artificial intelligence market.
Negotiations Already Completed
Industry sources said pricing discussions with customers began in June 2026 and were concluded during July, with the revised rates scheduled to become effective from the beginning of 2027.
Although the company declined to confirm the reported pricing plans, TSMC reiterated that its pricing approach is based on long-term value creation rather than short-term market opportunities.
A company spokesperson said TSMC does not comment on pricing matters but emphasised that its pricing strategy remains “strategic, not opportunistic,” adding that the company will continue working closely with customers while demonstrating the value of its advanced manufacturing capabilities.
Rising Costs Driving the Decision
Industry analysts believe several factors are contributing to the proposed increase.
TSMC has been investing billions of dollars to expand production capacity outside Taiwan through new fabrication plants in the United States, Japan and Europe, while simultaneously continuing investments in next-generation semiconductor technologies.
In addition, the company faces higher expenses related to advanced chipmaking equipment, supply chain costs and specialised materials required for increasingly complex semiconductor manufacturing.
These rising operational costs have prompted the company to seek moderate pricing adjustments while avoiding sudden increases that could disrupt customer relationships.
Earlier this year, TSMC Chairman and CEO C.C. Wei indicated that the company intended to gradually increase prices where necessary, while avoiding the sharp pricing hikes seen in parts of the memory chip industry.
AI Boom Continues to Fuel Growth
The pricing decision also comes at a time when demand for advanced AI chips remains exceptionally strong.
Last week, TSMC reported a 77% year-on-year increase in second-quarter profit, reaching a record T$706.6 billion (approximately US$22 billion), significantly exceeding market expectations.
The strong financial performance has been largely driven by surging demand for processors powering artificial intelligence applications, cloud computing infrastructure and advanced data centres.
As the world’s leading contract chip manufacturer, TSMC occupies a central position in the global semiconductor supply chain, producing chips for many of the world’s biggest technology companies.
Any pricing changes by TSMC are therefore closely monitored across the electronics industry, as they have the potential to influence production costs for smartphones, AI accelerators, personal computers, automotive electronics and a wide range of consumer devices.
With AI adoption continuing to accelerate worldwide and semiconductor manufacturing becoming increasingly capital-intensive, industry observers expect chip production costs to remain under upward pressure in the coming years.
Disclaimer: This report has been editorially prepared using publicly available information and official company statements. Readers are advised to refer to official announcements from TSMC for further details.
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