TSMC Plans Up to 10 Percent Chip Price Hike Amid Soaring Production Costs: Report

Global tech companies are facing pressure from rising semiconductor costs, and the situation could soon become even more challenging. A new report indicates that Taiwan Semiconductor Manufacturing Company (TSMC) plans to raise chipmaking prices next year. This move is expected to impact TSMC's customers, including Nvidia and Apple, and the higher costs could potentially be passed on to consumers. Higher memory costs are already pushing up handset prices in all markets, including India. 

TSMC Reportedly Set to Raise Chip Prices

Nikkei Asia, citing multiple unnamed sources, reports that TSMC is set to raise prices for both advanced and mature chip production services by up to 10 percent in 2027. With this move, the chipmaker is looking to offset rising costs for materials, manufacturing equipment and construction of new overseas chip plants.

TSMC reportedly held discussions with unnamed customers, with negotiations starting in June and concluding in July. The planned price hikes are said to affect TSMC's 28nm, 16nm, and 12nm process nodes, and they could become more expensive starting in 2027. Production under the 6nm node is also said to be up to 10 percent expensive next year.

The report cites a TSMC spokesperson as saying, “Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and sell our value to them.”

TSMC currently manufactures chipsets for leading tech brands including Nvidia, Apple, Qualcomm, Broadcom, MediaTek and Intel, and the planned price hikes are likely to impact upcoming smartphone chipsets. All product categories, including smartphones, laptops and wearables, are likely to be affected.

The move comes as demand for AI chips and data centre hardware continues to surge across the globe. Several Smartphone brands have increased prices of their smartphones in recent months to offset rising chip costs. In India, smartphone shipments fell 10 percent year-over-year in the April-June quarter, according to market research firm Counterpoint Research. The decline, the biggest for a June quarter in six years, was mainly driven by rising memory prices and weakening consumer demand.