Report: TSMC plans to raise prices by up to 10% in 2027, giving customers a one-year buffer.

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TSMC is currently negotiating with customers about price increases for 2027, with the hike reaching up to 10%, in order to cope with rising manufacturing costs. This move will directly impact the chip procurement costs of global tech giants such as Nvidia and Apple.

On July 21, according to Nikkei Asia citing insider sources, TSMC began price negotiations with customers in June and finalized a basic pricing adjustment plan in July, with increases ranging from 5% to 10%, varying according to the customer and product type. The new pricing will officially come into effect at the beginning of 2027, covering both advanced and mature process semiconductors.

TSMC is delaying the price increase until 2027 to give customers ample time to adjust. In its statement, TSMC said: "Our pricing strategy is strategic, not opportunistic. We will continue to work closely with customers and demonstrate our value to them."

Cost Pressure Drives Price Hike

The core driver behind TSMC's price increase is the overall rise in production costs. Material, equipment, and electricity inputs for manufacturing have been continuously climbing, putting significant pressure on the world’s largest foundry.

This month, TSMC raised its capital expenditure forecast for 2026 due to robust demand for artificial intelligence and increasing expansion costs—especially its $265 billion expansion plan in Arizona. Global supply chain disruptions brought about by Middle East conflicts and explosive AI industry demand have further pushed up TSMC's operating costs.

After announcing better-than-expected quarterly results in July, TSMC CEO C.C. Wei told analysts: "We won’t raise prices suddenly. We earn what our value is—we make sure profits and gross margins can support long-term sustainable expansion, which benefits both customers and TSMC. That’s our business philosophy."

Strong Customer Demand, Tension in Supply

TSMC is the core foundry partner for many top global tech companies, including Nvidia, Apple, Alphabet, and Amazon. Unlike the memory chip industry, which sees large price swings, TSMC has long fostered long-term, cycle-spanning partnerships with its customers.

However, the sustained boom in AI demand is reshaping this landscape. Customers like Nvidia have urged TSMC to speed up expansion to alleviate supply bottlenecks for AI accelerators and data center-related components. Just recently, TSMC announced second-quarter revenue and profit above estimates and raised its full-year growth forecast, but the company still faces challenges in fully meeting customer orders.

Price Hike Covers Both Advanced and Mature Processes, Affecting Multiple Customer Sectors

If this price increase is implemented, it will directly affect the cost structures of TSMC’s downstream customers. The 5%-10% increase covers both advanced and mature process product lines, meaning a broad range of products from high-end AI chips to consumer electronics and automotive chips will be impacted.

TSMC’s decision to delay the new pricing until 2027 gives customers a buffer period and helps ease negotiation friction. TSMC emphasized that it does not comment on pricing details but reiterates that its pricing strategy is guided by strategic considerations.

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