TSMC is preparing a new increase in chip manufacturing prices that would start to be implemented in 2027. The rise would range between 5% and 10%, depending on the client, the product, and the contracted process, at a time when the cost of DRAM memory, NAND, and other essential components for computers, smartphones, and data centers is also increasing.
The key points of TSMC’s price hike in 20 seconds
- TSMC would apply increases of up to 10% starting in early 2027.
- The revision would affect both advanced processes and mature nodes.
- Expansion outside Taiwan and machinery upgrades are raising costs.
- UMC and major memory manufacturers are also raising prices.
- The increase will not necessarily be fully passed on to consumers.
The information, initially published by Nikkei Asia and confirmed by sources consulted by Reuters, indicates that negotiations with key clients began in June and concluded during July. TSMC has not announced a general rate because its contracts depend on reserved volume, the technology used, packaging, and the terms agreed with each company.
Therefore, not all clients would face the same increase. A company reserving large volumes of wafers over several years could secure different terms than a chip designer with smaller orders or limited access to the most in-demand processes.
TSMC’s clients include Apple, NVIDIA, AMD, Qualcomm, MediaTek, and Broadcom. They also include companies that design their own processors for AI, networking, and data centers, which rely on TSMC’s manufacturing.
The increase will also affect mature nodes
The cost hike would not be limited to the most advanced technologies. Processes at 12, 16, and 28 nanometers could also see increases close to 10%, according to published reports.
These nodes remain present in a significant portion of global electronics. They are used in microcontrollers, networking equipment, vehicles, industrial systems, TVs, appliances, connected devices, and chips responsible for managing power supply.
For example, a graphics card or a server doesn’t contain just a CPU or GPU made with advanced processes. Around it, controllers, interfaces, communication chips, and regulators produced with older but sufficiently efficient and much more cost-effective technologies operate.
Hence, a rise in mature nodes can impact more products than a limited increase at 2 or 3 nanometers. The individual effect on each component may be small, but it accumulates when several suppliers adjust their tariffs simultaneously.
The decision by TSMC also coincides with high demand for capacity for AI. Accelerators used for training and deploying models occupy advanced wafers, require complex packaging, and demand large amounts of high-bandwidth memory, known as HBM (High Bandwidth Memory).
TSMC closed Q2 2026 with revenues of 1.27 trillion Taiwanese dollars, a 36% increase compared to the same period last year. The company attributed much of the growth to high-performance computing hardware and AI-related demand.
Manufacturing outside Taiwan is more costly
One argument explaining the new price revision is TSMC’s international expansion. The company is building and expanding facilities in the United States and Japan to diversify production and be closer to some customers.
In the US alone, investment commitments have risen to approximately $265 billion. The project includes new factories and packaging plants in Arizona, with facilities planned for processes at 2 nanometers and subsequent technologies.
Manufacturing outside Taiwan involves different labor, energy, logistical, and construction costs. It also requires relocating equipment, training specialized staff, and developing local supplier networks capable of providing chemicals, gases, wafers, and high-precision parts.
TSMC increased its investment forecast for 2026 to a range between $60 billion and $64 billion. A significant portion will be allocated to advanced processes, packaging, and capacity expansion to meet the demand for AI accelerators and high-performance chips.
Each new factory requires lithography, deposition, inspection, and etching equipment that can cost billions of euros. The extreme ultraviolet (EUV) lithography machines from ASML are just part of a production line consisting of hundreds of specialized systems.
TSMC maintains that its pricing policy is strategic, not opportunistic. The company rarely comments on individual contracts and has not publicly confirmed specific percentages attributed to the 2027 negotiations.
UMC, Samsung, SK hynix, and Micron also pressure prices
TSMC is not the only supplier reviewing its conditions. United Microelectronics Corporation (UMC), mainly focused on mature nodes, reportedly informed clients of wafer price increases for the second half of 2026. Reasons cited include the costs of materials, energy, equipment, and demand recovery.
The situation differs at Samsung Foundry. The South Korean company needs to increase utilization of its more advanced fabs and has competed for some contracts with lower rates than TSMC. This demonstrates that price increases are not uniform across foundries: prices depend on available capacity, manufacturing performance, and each provider’s market positioning.
The most noticeable pressure is emerging in memory. Samsung reported that its semiconductor division ended 2025 with record quarterly revenues and profits, driven by HBM sales and a general market price increase. Throughout 2026, it has continued to focus production on DRAM and NAND for servers and AI infrastructure.
SK hynix also expects the HBM market to continue growing strongly. The company has gathered estimates indicating significant increases in the average selling price of these memories, which have become among the most valuable components for AI accelerators.
Micron, on its part, states that constraints on factory space, long construction lead times, and shifts toward HBM are limiting growth in conventional memory supply. They expect the supply-demand balance for DRAM and NAND to remain tight beyond 2027.
This reallocation has consequences. A factory that dedicates more capacity to HBM may produce less conventional memory for computers, mobiles, or SSDs. Although the demand in these markets isn’t growing at the same pace as AI, a more limited supply could maintain or increase prices.
Intel might gain some competitive advantage through its own fabs, but this does not mean it is immune to rising costs. The company also purchases external components, uses TSMC processes for certain products, and needs to fund the development of Intel Foundry. Its costs are not solely dependent on wafer prices.
A 10% increase in manufacturing costs does not automatically mean a processor, graphics card, or smartphone will cost 10% more. The chip is only one part of the final price, which also includes memory, storage, packaging, board, cooling, transportation, distribution, and taxes.
Manufacturers can absorb some of the increase, renegotiate contracts, cut costs in other components, or adjust configurations. However, when increases occur simultaneously in foundry, DRAM, NAND, and packaging, the scope for containment diminishes.
The most probable outcome is an uneven impact. Products with high memory content, cutting-edge chips, or AI accelerators will be more exposed. In consumer devices, brands might maintain prices but reduce capacity, delay upgrades, or pass only part of the increase.
Frequently Asked Questions
How much will TSMC’s prices increase in 2027?
Available information suggests increases between 5% and 10%. The exact percentage will depend on the manufacturing process, reserved volume, product, and the negotiated terms with each customer.
Will the increase only affect 2nm and 3nm chips?
No. Mature nodes at 12, 16, and 28 nanometers could also see increases, extending the impact to automotive, networking, industrial electronics, and consumer devices.
Will processors and graphics cards be 10% more expensive?
Not necessarily. The manufacturing cost of the chip is only part of the final product price, though the increase will add to the costs of memory, storage, and other components.
What other manufacturers are raising their prices?
UMC has prepared increases for its foundry services, while Samsung, SK hynix, and Micron are benefiting from higher prices and tight supply in DRAM, NAND, and HBM memory.
