PCs and smartphones could become more expensive: TSMC considers new price increases

TSMC leaves the door open for future increases in prices of advanced semiconductors, indicating that inflation and the continued growth in demand for artificial intelligence applications are two factors increasingly affecting operational costs. While ruling out sudden and particularly aggressive hikes, the Taiwanese giant acknowledged that the current context makes it increasingly difficult to internally absorb the rising expenses necessary to support production expansion.

During the annual shareholders' meeting held in Hsinchu, President and CEO C.C. Wei stated that he would be favorable to increasing prices, following a trend already observed in other segments of the semiconductor industry. CFO Wendell Huang also confirmed that inflation is pushing production costs higher, although he emphasized that TSMC does not intend to apply multiple and sudden price increases. According to the executive, the value requested from customers reflects the technological leadership and manufacturing excellence achieved by the company.

TSMC's position is particularly relevant considering the central role it plays in the global supply chain. The company actually produces the most advanced chips designed by entities such as NVIDIA, AMD, and Apple and controls over 90% of global production capacity in the most advanced technological processes. Any increases in wafer prices could therefore reflect on the costs of AI infrastructures and, in the medium term, contribute to a rise in prices of numerous consumer electronics devices.

According to rumors published in previous months by TrendForce analysts, TSMC is considering a 15% increase for 3-nanometer wafers in the second half of 2026, followed by further increases ranging between 5% and 10% in 2027. Other rumors had also hinted at a strategy of gradual increases for technologies below 3 nanometers extending until the end of the decade.

The pressure behind this is primarily due to the boom in artificial intelligence investments. The demand for accelerators and processors for data centers continues to grow at a sustained pace, fueled by both major cloud providers and companies engaged in developing advanced AI models. Huang explained that TSMC is operating at full capacity and continues to expand its production capability as quickly as possible, but demand remains higher than the available supply. According to Wei, this scarcity situation could persist for several more years.

Despite the strong expansion cycle raising questions about the sustainability of investments and the market valuations of tech companies, TSMC dismisses the idea that the sector is going through a speculative bubble. Huang highlighted that major customers and hyperscalers have sufficient financial resources to continue investing in the long term, reinforcing the company's belief that AI represents a megatrend that is set to continue.

At the same time, TSMC is advancing a significant international expansion program with new investments in the United States, Germany, and Japan. However, the company has rejected the interpretation that these initiatives are the result of political pressures from Washington or Beijing. According to Huang, the decision to build new plants outside of Taiwan primarily stems from customer requests for production capacity to be closer to their respective markets.

However, one strategic point remains firm: the most advanced production technologies will continue to be developed and realized mainly in Taiwan. Huang stated that transferring the entire industrial ecosystem necessary for the production of the most sophisticated semiconductors to the United States would take at least five to ten years, if not more. This assessment diminishes expectations for a rapid relocation of advanced manufacturing on American soil, despite the $165 billion plan announced by TSMC in Arizona.