Report: TSMC Plans Price Hike of Up to 10% in 2027, Giving Customers One Year to Adjust
TSMC plans to raise wafer prices by 5%-10% in early 2027, covering both advanced and mature processes, primarily due to rising costs for materials, equipment, and electricity, driven by strong AI demand and its U.S. expansion plans. This move will impact major clients such as NVIDIA and Apple. The company emphasizes that its pricing is strategic and has provided a buffer period to maintain long-term partnerships and support continuous expansion
TSMC is negotiating price increases with customers for 2027, with hikes reaching up to 10%, to cope with continuously rising manufacturing costs. This move will directly impact the chip procurement costs of global tech giants such as NVIDIA and Apple.
On July 21, citing sources familiar with the matter, Nikkei Asia reported that TSMC initiated price negotiations with customers in June and finalized the base price adjustment plan in July, with increase ranges between 5% and 10%, varying by customer and product type. The new pricing will officially take effect in early 2027, covering both advanced and mature process semiconductors.
TSMC has delayed the price hike until 2027 to provide customers with ample time to adjust. In a statement, TSMC said, "Our pricing strategy is strategic, not opportunistic. We will continue to work closely with our customers to demonstrate our value."
Cost Pressures Drive Price Hikes
The core driver behind TSMC's price increase is the comprehensive rise in production costs. Rising costs for multiple inputs in the manufacturing process, including materials, equipment, and electricity, have placed significant pressure on the world's largest contract chipmaker.
Earlier this month, TSMC raised its capital expenditure forecast for 2026, citing robust artificial intelligence demand and increasing expansion costs—particularly its $265 billion expansion plan underway in Arizona. Global supply chain disruptions triggered by conflicts in the Middle East, along with explosive demand from the AI industry, have further pushed up TSMC's operating costs.
After announcing better-than-expected quarterly results in July, TSMC CEO C.C. Wei told analysts, "We do not raise prices abruptly. We earn our value, ensuring that profits and gross margins are sufficient to support long-term continuous expansion, which benefits both customers and TSMC. This is our business philosophy."
Strong Customer Demand, Tight Supply
TSMC is a core foundry partner for many top global tech companies, including NVIDIA, Apple, Alphabet, and Amazon. Unlike the memory chip industry, characterized by significant price volatility, TSMC has long insisted on building long-term partnerships with customers that withstand economic cycles.
However, the sustained explosion in AI demand is reshaping this landscape. Clients such as NVIDIA have urged TSMC to accelerate its expansion efforts to alleviate supply bottlenecks for AI accelerators and data center-related components. Although TSMC just announced second-quarter revenue and profit figures that exceeded expectations and raised its full-year growth forecast, the company still faces challenges in fully meeting customer orders.
Price Hikes Span Advanced and Mature Processes, Impacting Clients Across Multiple Sectors
If implemented, this price increase will directly impact the cost structures of TSMC's downstream clients. The 5% to 10% hike covers both advanced and mature process product lines, meaning a wide range of products, from high-end AI chips to consumer electronics and automotive chips, will be affected.
By choosing to delay the new pricing until 2027, TSMC has provided a buffer period for customers, helping to ease negotiation friction. TSMC emphasized that it does not comment on specific pricing details but reiterated that its pricing strategy is guided by strategic considerations.
