TSMC CFO: Chip prices may rise, but not a "four or five-fold" surge

The world’s largest foundry, TSMC (Taiwan Semiconductor Manufacturing Company), has officially sent a price increase signal to the market, while also marking the boundaries for expectation management.

On June 9, TSMC Chief Financial Officer Wendell Huang stated in a media interview that inflation has indeed driven up the company’s operating costs, not ruling out future price adjustments, but clearly denying the possibility of a “four or five times” surge. Recently, TSMC Chairman and CEO CC Wei said at the shareholders meeting that he “hopes” to raise prices, citing the fact that competitors have already taken the lead. This marks the clearest price increase statement from TSMC management so far.

TSMC's stance affects the entire tech industry supply chain. As the manufacturer of the most advanced chips for Nvidia, AMD, Apple and others, any price adjustment by TSMC will impact the costs of AI infrastructure, which may eventually affect the terminal prices of electronic devices for consumers. Meanwhile, this statement is also the latest annotation for a new wave of price hikes across the global chip supply chain driven by AI—previously, memory chips and power semiconductors have already seen significant price increases.

Justified price hikes: Rising costs are the core logic

According to reports, Wendell Huang admitted in a media interview at Hsinchu Science Park that inflation has genuinely increased TSMC’s operating costs. “Inflation has indeed led to rising costs for us,” he said.

He also emphasized that TSMC’s pricing strategy will reflect the company’s intrinsic value, relying on its “technological leadership” and “excellent manufacturing capability,” rather than resorting to aggressive price jumps. “We reflect our value,” Huang said, and explicitly stated that there will not be sudden “four-times or five-times” price hikes.

CC Wei’s shareholder meeting remarks were even more direct. He pointed out that TSMC’s competitors have already raised prices, and the company “hopes” to follow suit. This is the clearest public expression of TSMC management’s willingness to raise prices.

AI demand: TSMC management is firmly convinced it’s not a bubble

Facing market doubts about the sustainability of AI investment, Wendell Huang’s attitude was clear.

“We are very firm in our belief in the big trend of AI,” he said. He pointed out that TSMC maintains close communication with customers and their customers—primarily hyperscale cloud computing companies—who have strong financial capability for continued investment.

TSMC’s stock has surged over the past year as demand for AI chips accelerated. Huang described a company striving to keep up with demand: “Customers are asking us to grow so much, but all we can do is grow as fast as possible. So far, we are still trying.”

However, market sentiment has not been smooth. This week, Asian tech stocks followed US stocks in a marked pullback, and concerns over sustained spending on AI infrastructure have increased, after global chip and AI-related shares had experienced extraordinary gains.

Regarding capacity layout, Wendell Huang stated clearly that TSMC’s expansion in the US, Germany, and Japan is driven by client demand.

Supply chain context: Price hikes have spread across multiple chip categories

TSMC’s price signal is part of the upward cycle for global chip supply chain prices driven by AI.

According to a Goldman Sachs research report, the market is facing the most severe memory chip supply shortage in 15 years, and institutions expect prices to continue rising sharply in the second quarter this year.

AI computing demand is believed to be the key driver in this round of shortages—from model training to inference deployment, demand for high-bandwidth memory (HBM) and server DRAM has skyrocketed, whereas the supply side is constrained by foundry construction cycles and equipment delivery, with limited flexibility for capacity expansion; the supply-demand gap continues to widen.

The power semiconductor sector is also seeing a new round of price hikes. Infineon, STMicroelectronics, Texas Instruments and other major international manufacturers have issued price increase letters multiple times this year, with the latest round effective from May.

According to statistics from third-party agency TrendForce, the average capacity utilization of eight-inch production lines among the world’s top ten foundries will climb back up to nearly 90% by 2026, with the relevant foundries having successfully passed pricing pressure onto clients.

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