Report: Demand for advanced process exceeds supply, TSMC considers price increases of up to 15%

``` TSMC is facing ongoing tight capacity for advanced process manufacturing, with supply chain sources indicating that foundry prices may rise in the second half of the year, with 3nm process prices expected to increase by 15%. According to media reports, supply chain insiders revealed that TSMC plans to moderately adjust prices for advanced process foundry services in the second half of the year to cope with rising upstream costs, with the most in-demand 3nm process expected to see an increase of about 15%. TSMC CFO Wendell Huang said in a media interview on June 9 that inflation has indeed driven up the company's operating costs, and future price adjustments are not ruled out, but explicitly denied the possibility of a "four to five times" surge. Meanwhile, TSMC’s consolidated revenue for May reached NT$416.975 billion, up 30.1% year-on-year, marking the third consecutive month above the NT$400 billion threshold and setting another monthly record. This indicates that demand for AI chips and high-performance computing continues to outstrip supply. Analysts believe there is a significantly higher chance that its Q2 operations will exceed the upper end of its financial forecast, with AI-driven structural growth momentum likely to persist into the second half of the year. Management Sends a Clear Signal for Price Hikes TSMC’s management has become increasingly clear regarding price increases. Chairman and CEO C.C. Wei stated at the shareholders’ meeting that he “hopes” to raise prices, as competitors have already taken action. This is the clearest indication yet from TSMC’s leadership on price hikes. CFO Wendell Huang has also confirmed that inflation has substantially pushed up the company’s operating costs, and that price adjustments are possible in the future, but emphasized there would not be any dramatic surges. Market watchers interpret recent statements from C.C. Wei and Wendell Huang as pointing in the same direction: TSMC is preparing for price hikes, with strong fundamental support from demand. May Revenue Hits New High, Q2 Expected to Surpass Upper Guidance TSMC’s consolidated revenue for May alone was NT$416.975 billion, up 30.1% year-on-year—the third straight month above NT$400 billion. Total consolidated revenue for the first five months reached NT$1.96 trillion, up 30% year-on-year, just a step away from the NT$2 trillion mark. According to TSMC’s Q2 guidance, the US dollar consolidated revenue range is US$39 to US$40.2 billion, with a median of US$39.6 billion, representing about 10% quarter-on-quarter and 32% year-on-year growth. Analysts note that combined revenue for April and May is already NT$827.7 billion, meaning that as long as June revenue remains strong, Q2 revenue in NT dollars is expected to reach the high end of guidance, and may even hit a new record for a single quarter. Capacity Expansion Still Can’t Keep Up with Demand Growth Although TSMC continues to increase wafer capacity, with monthly production expected to reach between 160,000 and 175,000 units in Q2, chip industry players note that customer queues have not eased significantly, and the growth in AI demand still far exceeds market expectations. Supply chain insiders state that rising prices for advanced process manufacturing could actually be positive for TSMC's major customers—higher price thresholds further raise barriers to entry for AI chips, helping leading customers lock in more capacity and gain a market advantage. AI Demand Spreads from Data Centers to Diverse Scenarios Analysts say that AI computing demand is spreading from data centers to sovereign AI, enterprise AI, and edge AI applications, boosting demand for advanced process manufacturing and advanced packaging technologies. TSMC not only controls crucial advanced process capacity such as 3nm and 5nm, but also, with advanced packaging technologies such as CoWoS and SoIC, has become a core manufacturing platform in the global AI computing race. At the shareholders’ meeting, C.C. Wei emphasized that AI demand remains very strong and that TSMC will strive to avoid becoming a bottleneck in the semiconductor supply chain. With major customers’ new platforms moving into mass production, TSMC’s operational momentum in the second half of the year remains solid. The current AI-driven growth is widely seen by the market as structural rather than a short-term pull-in. Risk Warning and Disclaimer The market has risks; invest with caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of any individual user. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this information is at your own risk. ```