Contract chipmaker looks to offset rising production costs
TSMC (NYSE:TSM) is planning to increase chip manufacturing prices by as much as 10% beginning in 2027, according to two sources familiar with the matter.
The planned price adjustments are intended to help offset rising expenses linked to raw materials, semiconductor manufacturing equipment and the construction of fabrication plants outside Taiwan, one of the sources said.
Nikkei Asia first reported the proposed pricing changes on Tuesday.
Both mature and advanced process technologies affected
According to the sources, the base price increase could reach up to 10%, with the final adjustment varying depending on individual customers and product categories.
Production using mature manufacturing processes, including 12-nanometre, 16-nanometre and 28-nanometre technologies, is expected to see increases of up to 10%.
Advanced chip production using process technologies below 6 nanometres is also expected to be subject to price increases of as much as 10%, one of the sources said.
Nikkei Asia reported that pricing negotiations with customers began in June and concluded in July, with the revised pricing structure scheduled to take effect at the beginning of 2027.
TSMC maintains long-term pricing strategy
A TSMC spokesperson declined to comment directly on pricing discussions when contacted by Reuters on Tuesday.
“Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and sell our value to them,” the spokesperson said.
Chief Executive Officer C.C. Wei said in June that he would like to increase prices, although he indicated the company would avoid the kind of sudden price hikes implemented by some memory chip manufacturers.
Strong AI demand continues to support earnings
The potential pricing changes come shortly after TSMC reported stronger-than-expected second-quarter results, underlining continued demand for artificial intelligence chips.
Last week, the world’s largest contract chipmaker posted a 77% year-over-year increase in second-quarter profit to a record T$706.6 billion ($22 billion), reinforcing its position as one of the key beneficiaries of the AI infrastructure boom.
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