TSMC to Increase Wafer Prices by Up to 10% in 2027: No Chip is Safe

According to rumors reported by Nikkei Asia, TSMC will introduce a wafer price increase starting in early 2027. The increases will range from 5% to 10% depending on the production process, the customer, and the type of product, affecting both advanced technologies and mature production processes, such as those at 28, 16, and 12 nanometers.

Negotiations with customers are said to have begun in June and concluded in July, allowing chip designers over a year to adjust their commercial and production strategies before the new pricing takes effect. The price hikes will particularly affect processes at 7 nanometers and lower, which represent the most significant part of TSMC's business. In fact, in the last quarter, 7 nm and more advanced technologies accounted for about 77% of revenue for the Taiwanese foundry, while mature processes contributed to the remaining 23%.

For some orders destined for the high-performance computing sector, particularly those exceeding initial forecasts from customers, TSMC is also expected to impose an additional surcharge ranging from 10% to 15% on top of the base increase. In these cases, the total increase could therefore exceed 10%, reflecting the strong demand for production capacity for AI accelerators and high-performance processors.

Among TSMC's major clients are Apple, NVIDIA, Qualcomm, MediaTek, Google, Amazon, and Arm. While it hasn't been clarified whether the 2 nanometer process will be included in the new pricing, any increase for this technology could translate into higher production costs for the next generation of SoCs and GPUs intended for smartphones, data centers, and artificial intelligence applications.

Unlike what has been observed in the memory market, where particularly marked price increases have been recorded in recent months, TSMC's strategy aims for a gradual approach. The President and CEO C.C. Wei had stated during the recent financial results presentation that the company does not intend to replicate multiple increases over a few months, preferring a policy that ensures adequate margins to sustain long-term investments without compromising customer competitiveness.

The company itself, while avoiding direct comments on pricing rumors, has reiterated that its business policy is "strategic and not opportunistic", emphasizing the intention to continue collaborating with customers by enhancing the offered services.

The decision is primarily based on the rising costs across the entire production supply chain. Materials, chemicals, lithographic equipment, and logistics have seen significant price increases, in addition to the expenses incurred for building new plants abroad. TSMC is indeed accelerating its international expansion, with an additional $100 billion investment in the United States, primarily aimed at facilities in Arizona.

The Chief Financial Officer Wendell Huang has also highlighted how the expansion of international fabs and the start of mass production at 2 nanometers will continue to put pressure on corporate margins. Adding to this scenario are geopolitical tensions and concerns over the availability of certain raw materials and industrial gases, along with an ever-increasing demand for semiconductors and memories fueled by global investments in artificial intelligence. In short, forget about affordable hardware like in the past for a very, very long time.