The world's largest contract chip manufacturer TSMC will increase prices for its products by a maximum of 10% from the beginning of 2027. Multiple sources told Nikkei Asia that the decision is related to an increase in the cost of materials, production equipment and rising costs for the construction of new factories abroad.
The company began negotiations with clients on price revisions in June; they were completed a month later. The basic increase will be from 5 to 10% depending on the customer and type of product. Thus, prices for models with 12-nm, 16-nm and 28-nm technologies may increase by 10%. For additional orders of high-performance computing chips, the company plans to charge another 10-15% premium on top of the base increase.
According to the publication, all global supply chains in the technology industry are experiencing inflationary pressure. Goods and services are becoming more expensive, from fiberglass and printed circuit boards to laser equipment and microchip packaging. At the same time, technology markets are bracing for unprecedented shortages of DRAM and NAND flash memory modules as record investments in artificial intelligence continue to drive demand, Nikkei Asia said.
An additional factor was geopolitical tension. Following the outbreak of hostilities between the US and Iran in February this year, TSMC warned that the escalation of the situation could hamper the supply of critical gases used in semiconductor production and lead to further rising costs.
The company has taken a relatively low-key approach, according to industry officials familiar with TSMC's pricing policy. She rejected an immediate price increase and delayed it until 2027, giving customers time to prepare for the changes after negotiations are completed.
“Our pricing strategy is strategic, not opportunistic. We will continue to work closely with clients and prove the value of our services,” a company representative said in comments to Nikkei Asia.
The company's clients include leading chip designers including Nvidia, Apple, Google, Amazon, Qualcomm, Arm and MediaTek.
Many chip makers have already revised prices this year to offset increased costs in labor, materials, chemicals and logistics. In particular, Intel and AMD raised the price of a number of processors several months ago amid limited supply and growing demand for artificial intelligence computing systems.
