Taiwan Semiconductor Manufacturing Company to Raise Chip Prices Amidst Supply Chain Pressures

TSMC plans a 5-10% price increase for advanced chip processes in 2026 to counter U.S. tariffs, exchange rate fluctuations, and supply chain cost pressures. Major clients like NVIDIA and Apple will face higher costs. TSMC Chairman Mark Liu jokingly declined to comment on using price hikes as a solution.

Taiwan Semiconductor Manufacturing Company (TSMC) has announced plans to raise prices for its advanced chip processes by 5-10% in 2026, citing U.S. tariffs, exchange rate fluctuations, and supply chain cost pressures [1]. This price hike will impact major clients such as NVIDIA and Apple, which rely heavily on TSMC for their chip needs.

The price increase will affect TSMC's 5nm and lower nodes, including 5nm/4nm, 3nm, and 2nm processes. TSMC Chairman Mark Liu declined to comment on using price hikes as a solution, but the move is seen as a necessary step to maintain profit margins in the face of external challenges [2].

TSMC's market dominance and lack of viable competition have given it significant pricing power. Despite this, TSMC has traditionally kept prices competitive, contributing to its popularity among tech giants. The upcoming price increase reflects the company's need to offset various cost pressures.

The global foundry market has seen robust growth, with TSMC leading the way. TSMC's market share reached 70.2% in the second quarter of 2025, driven by strong demand for AI applications and graphics processing units (GPUs) [3]. The company's revenue grew by 18.5% from the previous quarter, highlighting its strong performance.

TSMC's expansion into the U.S. market, including a $300 billion investment and plans to scale up to 2nm production, underscores its commitment to securing supply chain resilience. The company aims to provide America with an independent packaging supply chain, positioning itself to dominate the AI-driven semiconductor market [3].

While TSMC's price increase is likely to be met with some resistance from clients, the company's strong market position and commitment to innovation suggest that it is well-equipped to navigate these challenges. For investors, TSMC's strategic approach to pricing and supply chain management represents a significant competitive advantage.

References:
[1] https://wccftech.com/tsmc-is-set-to-raise-prices-of-cutting-edge-chips-by-up-to-10-percent/
[2] https://www.businesskorea.co.kr/news/articleView.html?idxno=250802
[3] https://www.ainvest.com/news/tsmc-trade-secret-ecosystem-implications-semiconductor-supply-chain-security-2508-13/